FINANCIAL SERVICES AND FUTURE DIRECTIONS

Reference: World of Business, 4th Edition, Ch 13

1. Read pages 304-316. You are responsible for knowing this information. Some of
it, I am sure, is familiar to you already. I would suggest you make brief notes on
any part of this section which you are unfamiliar with; i.e. it is new information
you did not know already.

2. Other Financial Services – p 316 – 326

Define and/or explain the following terms, with examples where possible. Be sure to
explain the advantages or disadvantages where applicable, as well as include the
general information that describes what each term is. Some of these services may be
useful to answer part of your summative.

Loans and term loans- A loan is the lending of money from a financial institution to a
person, business, and/or the 3 levels of governments. These are the most significant
part of a financial institution’s income because the interest generated is important. A
term loan is a loan that is set to be paid back within a certain time limit/ by a certain
time. I.e. a bank loan to start up a business.
Lines of credit- A form of access to credit that has been arranged between your
financial institution and you. You can buy stuff with this credit from many places, and
pay back your financial institution later, with interest.
Credit cards- You can buy stuff with this credit from many places, and pay back your
financial institution later, with interest. They can be sued throughout the world. I.e.
Visa cards, Master cards.
Direct deposits- Transferring funds from an outside source right to a specified account
that you choose. For example if you are expecting something such as income tax
refund from the government, you can design one of these so that they deposit it
directly to a certain account.
Money order- Kind of like a cheque. The institution that issues this guarantees to pay
the amount on the order to the payee. This also prevents the payee incase it gets stolen
or lost along the way.
Draft- Only issued by financial institutions, and normally in big amounts.
Night depository- Allows customers to drop off important financial documents at any
time of any day. This way the customer does not need to be there when the documents
are processed. I.e. a deposit of church offering would be sealed in a special deposit
bag, and dropped off by a member of the church council into a night depository chute.
Overdraft protection- When a cheque is written to someone, and the person doesn’t
have enough money in their account to cover for the cheque that they wrote it’s called
overdraft. Overdraft protection is provided by a financial institution. This lends the
depositor the difference so that the payee can cash the cheque.
Preauthorized bill payments-
Safety deposit boxes-
Traveller’s cheques-
Combination service packages-
Electronic funds transfer system-
 Shared ABM networks-
Interac Direct Payment and debit cards-
Telephone and online banking-
Electronic bill presentment-
Wireless online banking-
Smart cards-
The future of financial services-

When you are finished this, you have the rest of the time to work on your summative.
Use your time wisely!