Personal banking

Banks are sophisticated business organizations which offer a wide range of financial services to both customers and non-customers alike. The major service offered by a bank to anyone who becomes a customer is that of the safe-keeping of their money. The customer does not have to worry of large sums of cash being left around at home or at the business premises. Add to that the convenience of being able to shop with a cheque book and a guarantee card (backed by the bank s collection and payment services), and you can see that it is possible for banks to attract customers by offering the basic service alone.

Once the customer's account has been opened and the cheque book issued, the customer will wish to keep funds on his or her account. It has been estimated that some 55 per cent of the workforce receive their wages and salaries in a non-cash form. Of these, the biggest proportions have their earnings paid directly into their current account at the bank. Having funds available for these people entails no effort on their part (except not to overspend it). The cash earners, and anyone else who wishes to bank money, can deposit their funds in their account by filling in a paying-in slip.

Books of paying-in slips are prepared by the banks for their customers to fill in when required. The clerk's job is to ensure that the cash paid in over the counter matches the sum in the right-hand column. If everything is in order, the slip is stamped with the bank or branch stamp, which contains the date as well, then initialed. The clerk's stamp on the counterfoil acts as a receipt and a record for the customer. Note that it is possible to pay in cheques and other money instruments received from other persons. The clerk would check that the cheque was made payable. This process of signing on the back is known as endorsement.

The cheque is currently the main method of settling debts. The daily total amounts that pass through the clearing systems exceed the amount of money in circulation. The cheque repre­sents a claim to money — so that a person receiving a cheque has nothing more in his hands than a piece of paper until pay­ment has eventually been made. So while the use of cheques for everyday purchases has the advantage of allowing a person to carry less money, it has the disadvantage that the shopkeeper may be unwilling to hand over the goods unless he can be assured that payment of the cheque will be met.

This method is often used by local authorities in settlement of monthly rates, or hire purchase organizations for payment of the monthly debts due, or mail-order organizations for goods purchased. The main services — gas, water, electricity, tele­phone — will all issue a paying-in slip, usually at the bottom of the bill to allow the person to settle the debt by payment into their account at another bank or branch.

Writing out a cheque is no longer the only means by which the customer can draw out his or her money. A cheque card is intended to give the shopkeeper an assurance that a cheque will cover the amount of the purchase. A cheque card is a bank's guarantee that payment of up to £ 50 will be made. All the shopkeeper has to do is to check that the signature on the card matches that of the signature on the cheque and that the unique number on the card is noted on the reverse of the cheque. The card must not of course be out of date, and where the card is not a combined cheque and a credit card, the code number on the card must be the same as the number on the cheque.

The bank will issue a cheque card to those customers whom it judges to have funds available to cover drawn cheques, for exam­ple, the customer who has a regular income — salary, wages, pen­sion — paid into the account. A cheque book and a guarantee card together provide the means for the customer to enjoy the con­venience of cash-free shopping for items under £ 50. In addition, a customer can go into any branch of a bank and obtain £ 50 since the paying bank is assured of reimbursement when the cheque is accompanied by the guarantee card.

Increasingly, as technology has progressed and the number of transactions has risen, banks have looked for automated systems as a way of delivering services. The basic automated teller machines (ATM's) can provide a customer with cash, give a current-account balance, and take an order for a new cheque book and an order for a statement. The more sophisticated will allow a customer to pay money in and give him a print out of the ac­count rather than just a balance. All these functions can take place outside the "traditional" banking hours of between 9.30 a.m. and 3.30 p.m.

In addition to the customer convenience that comes from having access to one's funds at any time, ATM's may be used at any location. You can find these ATM's in the walls of the High Street banks. Commercial banks are building special lobbies to house these machines which are not confined to banks. ATM's can be found in major shopping centres, in factories, on campus sites of universities, on railway stations, and so on.

To use a machine the user has to have a specially issued card on the back of which is a strip. Concealed in this strip is the per­sonal identification number (PIN) of the card-holder. Of course, the card-holder knows, and is expected to memorize, his or her own PIN. The card is fed into the machine, which then throws up a series of instructions (including the punching in of the PIN) which the user has to follow. The machine delivers the money (or the statement) to the user and then returns the card at the end of the transaction. Of course, it is not possible to withdraw limitless amounts of cash from the dispenser. The maximum may be agreed between the bank and the customer at the time of applying for the card, or the limit may be whatever the account holder's credit balance is at the time of the ATM transaction.