Series: APR 2024

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SMM – APRIL 2024 – L4 – Q6 – Evaluating Alternative Distribution Channels

Explain five criteria that can be used to evaluate alternative channels for distributing bank products and services, in the context of marketing strategy formulation.

Distribution is a key element of Marketing Strategy formulation. In your role as the Head of Business Development of your Bank, your Deputy Managing Director-Operations, has asked you to to write a report explaining five (5) criteria that can be used to evaluate Alternative Channels of distributing bank products and services.

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SMM – APRIL 2024 – L4 – Q5 – Financial Services, Inseparability, Customer Service Personnel, Marketing Strategy, Personnel Quality, Improvement Methods, Banking Sector, Ghanaian Context

Explain five ways a bank can maintain and improve the quality of its customer service personnel and their performance in service delivery, in the context of inseparability in financial services.

One of the key characteristics of Financial Services is that of inseparability. The selling of the service cannot be separated from the individual rendering the service. This implies that Customer Service personnel constitute an important element of Financial Services Marketing Strategy. In your role as the Head of Customer Service in your Bank, your Chief Executive Officer has asked you to write a report explaining five (5) ways in which the bank can maintain and improve the quality of its personnel and their performance in Customer Service Delivery.

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SMM – APR 2024 – L4 – Q4 – Internal Marketing Communications

Write a memorandum explaining the importance of internal marketing communications in banks and prepare an outline of an internal marketing plan for presentation.

The increased recognition and use of Internal Marketing Communications by banks throughout the world suggests that Bank employees can be regarded as an important but often neglected target audience. In your role as the Head of Marketing and Corporate Affairs Department in your Bank, write write a memorandum on the subject to be sent to the Head of Human Resource. Explain briefly why Internal Marketing Communications are important. Prepare an outline of an Internal Marketing Plan for presentation at the next Management meeting.

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SMM – APR 2024 – L4 – Q3 – Price Elasticity in Banking Products

Explain five reasons why demand for some banking products price elastic is while for others it is price inelastic, in the context of training Treasury Officers.

In your role as the Head of Marketing in your Bank, your Head of Human Resource Management has asked you to run a workshop for newly recruited Treasury Officers. Explain with five (5) reasons why the demand for some banking products is Price Elastic and the demand for others Price Inelastic.

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SMM – APR 2024 – L4 – Q2 – Factors for Selecting a West African Market under AfCFTA

Write a paper explaining five factors with examples for a multinational bank to consider before selecting a West African market to enter, leveraging the AfCFTA initiative.

In your role as Head of Business Development of a multinational Bank planning to enter the West Africa market to take advantage of the African Continental Free Trade Area (ACFTA) initiative, your Managing Director has asked you to write a paper to Management. Explain, with examples, five (5) factors the bank should take into consideration before selecting a particular market in West Africa.

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SMM – APR 2024 – L4 – Q1 – Development of 5-Year Strategic Marketing Plan for New Investment Product

Develop a 5-Year Strategic Marketing Plan for a new investment product targeted at high-net-worth bond holders affected by Ghana's DDEP, focusing on value creation in the banking sector.

Any investment decision should be aimed at a coherent objective of creating value. As a result of Ghana’s Domestic Debt Exchange Programme (DDEEP), the value of Government of Ghana Bonds as well as sales has reduced considerably. Potential and existing investors who are highnetwork individuals are now diversifying their investments from the bonds.

Your Bank after market research on bonds purchased has decided to develop a new investment product targeted at those potential and existing bond holders. The success of any New Product Development includes the development of a Strategic Marketing Plan for the product. As the Head of Business Development of your Bank, you have been asked by the Chairman of the Product Development Committee to develop a 5-Year Strategic Marketing Plan for the new product.

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RM – APR 2024 – L4 – Q8 – Liquidity Management and Governance Measures

Discusses five internal or regulatory measures to avoid bank liquidation due to poor liquidity and governance.

Improper Liquidity Management and weak Corporate Governance practices have caused the collapse of Ghanaian banks in the past.

Discuss any five (5 internal or regulatory measures that these banks could have resorted to in a bid to avoid liquidation.

(20 marks)

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RM – APR 2024 – L4 – Q7 – Outsourcing and Collaboration Risks

Discusses five key risk implications from outsourcing and collaborations with Telecom and Fintech.

Discuss at least five (5) key risk implications arising from the inevitable outsourcing of aspects of the banks’ operations and collaboration with Telecommunication and Fintech companies. (Hint – Discuss operational risk perspectives)

(20 marks)

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RM – APR 2024 – L4 – Q6 – Treasury Policy Areas

Discusses five key areas for a Treasury Policy and their criticality.

Discuss broadly five (5) key areas to be addressed by a Treasury Policy, indicating why these are critical for the effective functioning of the Treasury Department in its capital maintenance, liquidity and income generation functions.

(20 marks)

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RM – APR 2024 – L4 – Q5 – Cyber Security in Information Security Management

Defines Cyber Security, sources of vulnerabilities, and its importance in banking.

(a) What is “Cyber Security” in the context of Information Security Management? (10 marks)

(b) What are the key sources of vulnerabilities in the Cyber Space of Banking Businesses? (5 marks)

(c) Why has Cyber Security assumed such importance in Contemporary Banking? (5 marks)

[Total: 20 marks]

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CSMCE – APR 2024 – L2 – Q4 – Survey Method for Primary Data

Explain the Survey Method for gathering primary data with advantages and disadvantages; list and discuss two types of interviews under it.

(a) What is the Survey Method of gathering Primary Data and what are its advantages and disadvantages?                                                (b) List and briefly discuss two (2) types of interviews under the Survey Method.

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CSMCE – APR 2024 – L2 – Q3 – FIND Interview System

Define the FIND Interview System, explain what each letter stands for, and state its main objective.

What is the FIND Interview System? Explain by indicating what the letters stand for and the main objective of the FIND Interview System.

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ITF – APR 2024 – L3 – Q2 – Option Forward Contract Definition and Rate Calculations

Define an Option Forward Contract and calculate the appropriate rates for three given scenarios involving option contracts for buying or selling foreign currencies under discount conditions.

(a) What do you understand by Option Forward Contract?                                                                                                                                (b) From the following scenarios, calculate the appropriate rate for your customer, by specifically choosing the correct Option Rate applicable in each circumstance:                                                                                                                                                                           i. Your customer wishes to take out an Option Contract on 1 March for the period 1 March to 1 April, to buy US $30,000 to pay for goods imported from the USA. Your bank’s rates are as follows: 1 March Spot USD/GHS 11.3450 11.3540 One month forward 0.0520 0.0545 cedis dis.                                                                                                                                                                                              ii. To manage the risk of its Foreign Exchange, your customer came to arrange for Forward Exchange Contract for export proceeds of NGN 7.8 million due within the next two months. Your customer wishes to take out an Option Contract on 1 March for the period 1 April to 1 May to sell the Foreign Currency to your bank. Your quoted rates are as follows: 1 March Spot GHC/NGN 68.0110 68.0125 One month forward 0.0120 0.0145 naira dis Two months’ forward 0.0165 0.0195-naira dis.                                    iii. The Import Bill of your customer falls due within the next three months. The customer wishes to take out an Option Contract on 1 March to pay the Swiss Franc 25,000 anytime between 1 May and 1 June. Rates are as follows: 1 March Spot CHF/GHS 12.8215 12.8265 Two months’ forward 0.0865 0.0890 cedis dis Three months’ forward 0.0910 0.0945 cedis dis [

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CSMCE – APR 2024 – L2 – Q1 – Six Steps for Solving Customer Problems

List and explain the six steps that bank staff must follow to help a customer or prospect solve a presented problem and achieve their goal.

When a customer or prospect presents a problem, he/she needs solutions to, the bank staff needs to let him/her know how they can solve the problem. List and explain the six (6) steps the staff has to go through to help him/her achieve their goal.

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ITF – APR 2024 – L3 – Q8 – Post-Shipment Finance Products

Explain briefly the post-shipment finance products: Export Bill Negotiation, Export Bill Discounted, Advance against Banker's Acceptance, and Advance against an Export Bill sent for Collection.

Post-Shipment Finance refers to an Advance or Loan extended to the exporter on the strength of documentation after goods have been shipped to the importer. It is more popular in Cross Border Trade transactions. This facility is extended to the exporter either on with or without recourse basis and is also applicable to both Documentary Credit and Non-Documentary Credit transactions.

REQUIRED                                                                                                                                                                                                                            With the above in view, explain very briefly, the following Post-Shipment Finance Products:                                                                          A. Export Bill Negotiation                                                                                                                                                                                                 B. Export Bill Discounted                                                                                                                                                                                                  C. Advance against Banker’s Acceptance                                                                                                                                                                      D. Advance against an Export Bill sent for Collection

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ITF – APR 2024 – L3 – Q3 – Cost Calculation for Specialized Steel Quotations

Calculate the effective cost of 100 tons of specialized steel from different country quotations considering payment terms and additional information and determine the most favorable quotation ignoring other charges.

Held and Sons are Stockholders in London whose account is operated on Overdraft basis. Hitherto, they have obtained their Stocks in the UK, but they are now forced to look elsewhere for supplies of specialized steel. They have received the following quotations:

Country Price Per Ton Payment Terms
a. Norway NOK 2,125 FOB, Oslo Open Account: Settlement one month after shipment.
b. Denmark DKK 1,560 CFR, London Draft drawn payable two months after shipment (Collection Charges for buyer).
c. Turkey TRY 2112 CIF, London Irrevocable Documentary Credit payable three months after shipment.

Using additional information set out below, show by calculating the cost of 100 tons of the steel, which of quotations (a), (b) and (c) would be the cheapest for your customer.

Freight charges from any European Port £5 per ton
Insurance (to be affected on 110% of CIF value) 1% payable in £
Collection Charges (total for both banks) ¼ %
Documentary Credit Charges (including Acceptance Commission) ¾ %
Overdraft Interest for one month (considered as 1/12 of a year) 15% pa.
Ignore all other possible charges.

It is to be assumed that your customers would have covered any Exchange Risk on the day of shipment, in accordance with rates quoted below, and that all payments and charges relative to any particular quotation are debited on the same day.

Spot One Month Two Months Three Months
Norway 12.20 – 12.50 10 – 12c disc 15 – 18c disc 20 – 23c disc
Denmark 8.90 – 9.10 8 – 5c pm 10 – 8c pm 14 – 11c pm
Turkey 11.80 – 12.05 12 – 9c pm 14 – 11c pm 16 – 12c pm

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ITF – APR 2024 – L3 – Q2 – Option Forward Contracts and Rate Calculations

Define an option forward contract and calculate the applicable rates for three scenarios involving option contracts for buying or selling foreign currencies (USD, NGN, CHF) based on given spot and forward rates.

(a) What do you understand by Option Forward Contract?

(b) From the following scenarios, calculate the appropriate rate for your customer, by specifically choosing the correct Option Rate applicable in each circumstance:                                                                                                                                                                                     I. Your customer wishes to take out an Option Contract on 1 March for the period 1 March to 1 April, to buy US $30,000 to pay for goods imported from the USA. Your bank’s rates are as follows: 1 March Spot USD/GHS 11.3450 11.3540 One month forward 0.0520 0.0545 cedis dis.

ii. To manage the risk of its Foreign Exchange, your customer came to arrange for Forward Exchange Contract for export proceeds of NGN 7.8 million due within the next two months. Your customer wishes to take out an Option Contract on 1 March for the period 1 April to 1 May to sell the Foreign Currency to your bank. Your quoted rates are as follows: 1 March Spot GHC/NGN 68.0110 68.0125 One month forward 0.0120 0.0145 naira dis Two months’ forward 0.0165 0.0195-naira dis.

iii. The Import Bill of your customer falls due within the next three months. The customer wishes to take out an Option Contract on 1 March to pay the Swiss Franc 25,000 anytime between 1 May and 1 June. Rates are as follows: 1 March Spot CHF/GHS 12.8215 12.8265 Two months’ forward 0.0865 0.0890 cedis dis Three months’ forward 0.0910 0.0945 cedis dis

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ITF – APR 2024 – L3 – Q1 – Financing Options for Advance Payment

Calculate and compare two financing options for a customer awaiting an advance payment under a construction contract: borrowing the USD amount or the GHS equivalent, considering exchange rates, interest, fees, and a forward contract; select the most favorable option from the customer's perspective.

Zakaria Construction Plc. (ZCP) are your customers specialized in the construction of highways. Sometime in February, your customer approached you to discuss their intention to apply for a Bid Bond to participate in an International Competitive Tender by the Ministry of Roads and Highways. The Tender is for the award of a contract to construct the Eastern Corridor Road. After discussions with your bank, the Bid Bond was issued in Favour of Ministry of Roads and Highways. On March 1, Mr. Adamu, the Chief Finance Officer of ZCP, called to inform you that the company has successfully won the Tender and had been awarded a contract to construct a portion of the main project. At the meeting, Mr. Adamu showed other documents confirming the award of the contract – which also showed the contract value as USD1.2million. The meeting discussed at length, how the bank could assist ZCP to obtain an Advance Payment Bond in Favour of Ministry of Roads and Highways to enable the company access $11.25 %$ initial Mobilization Funding of the contract value.

The following events took place: a. On April 1, the Advance Payment Guarantee was issued and submitted to the Ministry of Roads and Highways. b. The $11.25 %$ Advance Payment Funding is confirmed by Ministry of Roads and Highways and will be received by your bank exactly in three months’ time, on July 1, for customer’s account. c. Also on April 1, the company entered into three months’ Forward Contract to sell the US Dollar proceeds of the $11.25 %$ Advance Payment to your bank on arrival of funds.

ZCP has to acquire materials before main construction works begin in July and so, have requested your bank for immediate funding and have proposed two options as follows: I) To borrow the US Dollar amount of the $11.25 %$ Advance Payment for three months and repay when it is received on July 1. ii) To borrow Ghana Cedi equivalent of the US Dollar amount for three months and repay from proceeds of the three months Forward Contract.

Rates available for the day are as follows:

April 1, Spot 10.2570
One month forward 0.0085 10.2640
Two months’ forward 0.0115 0.0095 cedis discount
Three months’ forward 0.0135 0.0125 cedis discount
0.0145 cedis discount

You are also given the following additional information: a. Term SOFR (Secured Overnight Financing Rate) which has replaced the LIBOR, is quoted this morning for 3 months US Dollar at $5.1 %$ with your bank’s margin at $4.5 %$. b. Commitment and Arrangement Fees are charged separately on Dollar borrowing at $1.50 %$ and $0.50 %$ respectively. c. Interest and other charges on US Dollar borrowing should be translated at middle-rate. d. For ZCP, your bank will lend local currency at $2 %$ above its Base Rate of $21.75 %$ p.a. e. Processing Fees for Cedi Facility is $1.0 %$. f. Cedi Facility also attracts Group Insurance Commission of $1.50 %$.

REQUIRED Calculate each of the two options and choose the most favorable one from your customer’s point of view, stating your reason.

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MFS – APR 2024 – L4 – Q8 – Factors in Designing Retail Branches

Explain six factors to consider in designing bank branches.

Having selected a Retail Branch location, the bank needs to decide on the design of the branch, both inside and outside. This is because Physical Evidence conveys the nature of the service involved, reassures customers and also engenders emotional reaction through sensory and symbolic blends. As the Head of the Retail Department of a bank planning an organic growth, the Chairman of the Branch Development Committee has asked you to submit a report explaining six (6) factors the bank needs to take into consideration in designing the branches.

(20 marks)

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MFS – APR 2024 – L4 – Q7 – Factors Affecting Choice of Retail Bank

Explain five factors affecting a potential retail customer's choice of a Retail Bank

The essence of Marketing revolves around identifying and satisfying customer needs. Therefore, understanding the consumer and organizational buying behavior and the various stages in the buying process is a prerequisite for successful selling. Consumer Buyer Behaviours in Financial Services affect the choice of a retail bank. In your role as the Head of Retail Banking Department of your Bank, you are to submit a paper to your General Manager, Client Service, explaining five (5) factors that could affect the choice of a Retail Bank by a potential retail customer.

(20 marks)

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