Retail Banking and Household Finance

This module has been developed to equip you with the skills and knowledge to manage the financial needs of households. It is intended for professionals and academics, both practicing and aspiring, providing user-friendly technical tools for increased efficiency and effectiveness in your day-to-day professional life. Central to this module are two core issues:

• What are the financial needs of households (both those raised and those neglected due to financial illiteracy or behavioural biases)?
• How could a bank meet these financial needs, and why is it in its interests to do so?

Learning outcomes

When you have completed your study of this module, you will be able to:

• evaluate the role of household characteristics in household portfolio choices
• explain the functions of retail banking products and services
• discuss the principles of retail lending        
• analyse the determinants of mortgage choice
• examine the impact of banking competition on consumer welfare
• discuss the benefits and costs of relationship lending
• explain the main features of private banking products and services. 

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Pond K (2017) Retail Banking. 4th Edition. Hastings UK, Gosbrook Professional Publishing.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Household Wealth and Risk Preferences

• 1.1 Introduction
• 1.2 Household Intangible Wealth
• 1.3 Household Tangible Assets
• 1.4 Household Liabilities and Financial Crises
• 1.5 Household Risk Preferences
• 1.6 Conclusion

Unit 2 Household Portfolio Decisions: Allocation and Rebalancing

• 2.1 Introduction
• 2.2 Household Participation in the Stock Market
• 2.3 Household Portfolio Selection
• 2.4 Household Portfolio Rebalancing
• 2.5 Conclusion

Unit 3 Prospect Theory, Retirement Planning, and Financial Literacy

• 3.1 Introduction
• 3.2 Behavioural Finance and Investor Behaviour
• 3.3 Retirement Planning
• 3.4 Financial Literacy
• 3.5 Conclusion

Unit 4 Retail Banking: Banking Products and Channels

• 4.1 Introduction
• 4.2 Interest-based Products
• 4.3 Non-interest-based Banking Products for Households
• 4.4 Non-interest-based Banking Products for SMEs
• 4.5 Payment Services
• 4.6 Retail Banking Channels
• 4.7 Conclusion

Unit 5 Retail Lending and Household Borrowing

• 5.1 Introduction
• 5.2 Retail Lending
• 5.3 Household Borrowing: Mortgages
• 5.4 Mortgage Refinancing
• 5.5 Strategic Mortgage Default
• 5.6 The Credit Card Debt Puzzle
• 5.7 Conclusion

Unit 6 Retail Banking Competition

• 6.1 Introduction
• 6.2 Models of Competition in Retail Banking
• 6.3 Measuring Competition in Retail Banking
• 6.4 Evidence on Retail Banking Competition
• 6.5 Why Bank Competition Matters
• 6.6 Conclusion

Unit 7 Relationship Lending

• 7.1 Introduction
• 7.2 The Benefit of Long-term Bank-Borrower Relationships
• 7.3 The Cost of Long-term Bank-Borrower Relationships
• 7.4 Hard Information and Soft Information in Loan Pricing
• 7.5 Relationship Banking and Competition
• 7.6 Conclusion

Unit 8 Private Banking

• 8.1 Introduction
• 8.2 Private Banking Clients and Segmentation
• 8.3 Private Banking Products and Services
• 8.4 Tax Considerations
• 8.5 Industry Future and Trends
• 8.6 Conclusion

Module samples

• M488 Module Introduction (PDF)
• M488 Specimen Examination (PDF)
• M488 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules