Interview Quiz: The Front Line

Question 1

How would you notice someone is in financial difficulty before they tell you? A customer of many years comes into the branch and asks for a higher limit on their credit card, “just to get through the next couple of months”. They are friendly, a little rushed, and the system would approve the increase.

Accepted Answer

A. Look at what has changed rather than what is: payments going out late, the card used for cash, the minimum paid, pay that has stopped. Then ask how things are going before lending more.

Answer

B. Leave it to them to raise it. Asking someone about money problems they have not mentioned is intrusive, and it could embarrass a customer the branch has known for years.

Answer

C. Go by what the system shows. If the score and the limit rules say yes, the increase is appropriate, and it is not my place at the counter to second-guess a decision the bank has already automated.

Answer

D. Approve the increase so the customer leaves happy, and flag the account to be looked at again in a few months if the balance is still climbing.

Question 2

A client asks for something that is legal and not in their interest. What do you do? A client sold her business last year and was paid partly in shares of the company that bought it. She wants to borrow heavily against those shares to buy a property for her son. The loan fits the bank's lending rules. If the share price fell a long way, the bank would ask for part of the loan back — at the moment the shares were worth least.

Accepted Answer

C. Spell out the bad case — the bank asks for money when her shares are worth least, the property may go — then ask what the purchase is for, and leave the decision hers.

Answer

A. Arrange it. It is legal, it fits the rules, and it is her money and her decision to make about her own son.

Answer

B. Decline it. If the structure is not in her interest, the bank should not be the one putting it in front of her, however well it fits the lending rules.

Answer

D. Refer her to a financial adviser and go ahead with whatever the adviser recommends, so the advice sits with someone qualified to give it.

Question 3

A client loses money on a hedge you sold them. What happens next? Last year you sold an exporter a set of forward contracts to fix the exchange rate on the currency they are paid in. The currency has since moved the other way, so the contracts show a loss, and the exporter's competitors, who did not hedge, are having a better quarter. The finance director calls, angry, and asks you to close the contracts out.

Accepted Answer

B. Go back to what the hedge was for before defending it: the exposure it covered, and whether it is still there. If the receipts still come, show the whole position, contracts and income together.

Answer

A. Close them out as asked. The client wants out, they are the ones carrying the position, and keeping the relationship matters more than being right about it.

Answer

C. Explain that the hedge did exactly what it was bought to do: it fixed the rate. The loss on the contracts is offset by the better rate on their receipts, so the business is where it planned to be.

Answer

D. Escalate it to credit. A hedge that has lost money is a credit exposure to the client, and credit should decide what happens to it before anything is closed out.

Question 4

A payment file fails on a Friday afternoon. What is your first move? A long-standing manufacturing client's supplier payment run has failed at three o'clock on a Friday. Operations says it was rejected because it would have taken the account past its overdraft limit. The finance director calls: it is only timing, a large payment from a customer is due on Monday, and could you just push the file through.

Accepted Answer

D. Find out what has to go today, and whether Monday's receipt is real — who owes it, and whether they pay on time — then take that to whoever can approve an excess, today.

Answer

A. Push it through. They are a good client of long standing, the money is due Monday, and a failed supplier run does them real damage with people they will have to face again next week.

Answer

B. Tell them the limit is the limit, and the file can be sent again once the funds are in the account. The limit exists precisely for afternoons like this one.

Answer

C. Split the file: send the payments that fit under the limit, hold the rest until Monday, and spare the client the detail of which ones waited.

Question 5

A change would lift revenue and worsen outcomes for some customers. What do you do? You own the bank's small-business overdraft. Analysis shows that raising the fee for going over the limit would lift the product's revenue noticeably. Most of the extra fees would come from a small group of customers who go over their limit nearly every month.

Accepted Answer

C. Look at that small group first. A business over its limit every month is telling us its facility no longer fits. I'd come back with a proposal to sell them one that does.

Answer

A. Make the change. The fee is disclosed, it is within the rules, and the product has a revenue target that this is the cleanest way to meet.

Answer

B. Reject it. Anything that worsens outcomes for customers is a conduct risk, so the answer is no and the revenue has to come from somewhere else.

Answer

D. Test it on a sample of customers for a quarter and let the data decide whether the revenue holds and the complaints stay where we would expect them.

Interview Quiz: The Front Line

// FOUR BLOCKS, FOUR QUIZZES