Question

you are living off campus in an apartment near school. it is the first of the month and your rent is due. you won't have enough money in your account to cover until your employer deposits your paycheque. you don't want to overdraw your account, so you check your balance several times before sending your rent to the landlord. this example illustrates which innovation in banking?

Answer 1

The innovation illustrated in the example is online banking, which allows for the electronic management of finances, including the prevention of overdrafts by monitoring account balances in real-time, and facilitating payments through direct withdrawals, checks, or debit cards.

Step-by-step explanation:

The example provided illustrates the innovation of online banking, which is a service that allows you to manage your finances electronically. The student in question is avoiding an overdraft on their account by monitoring their balance closely before making a payment for the rent. This capability to check balances in real-time and execute transactions, such as transferring rent money electronically, is one of the essential services that banks offer to facilitate the financial management and cash flow of individuals and businesses. By offering the ability to make a direct withdrawal, write checks, or use a debit card, banks have significantly reduced the need to carry cash for transactions, contributing to the efficiency and security of financial dealings in a complex economy.