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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
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Thursday, July 10, 2008
Horace Mann uses the customer voice to drive improvements
Comtex
VANCOUVER, July 10, 2008 /PRNewswire via COMTEX/ ----Leading multiline insurer for educators wins prestigious award at 2008
Call Center Excellence Awards for innovative, customer-focused processes
and technology
Horace Mann, the leading provider of insurance to educators, was awarded "Best Use of Voice of the Customer" honors at the Call Center Excellence Awards, held in conjunction with Call Center Week, in Las Vegas, June 23 to 28, 2008.
The award was given by the International Quality and Productivity Center (IQPC) awards panel, in recognition for Horace Mann's use of customer feedback to drive process and system improvements, which has included the use of ResponseTek customer experience management software in their voice of the customer strategy.
"In today's service-based, networked economy, it's imperative that we go beyond listening to our customers," said Dennis Bianchi, Senior Vice President Claims & Regulatory Affairs at Horace Mann. "We recognize that we have to incorporate their voices into our business to actually make the service improvements that matter most to them. This award is a testament to the service quality initiatives we have made."
Horace Mann's voice of the customer (VOC) strategy includes initiatives specifically designed to leverage technology to make it easier for customers to talk to the company, and for front-line employees to identify service issues and at-risk customers based on customer experiences. These initiatives have been championed at all levels within Horace Mann's organization, and the implementation of the VOC program has led to improved customer satisfaction and retention rates.
According to Syed Hasan, ResponseTek President & CEO, "Most companies talk about listening to their customers, but very few incorporate the customer voice into day-to-day operations to drive improvements in the customer experience and increase customer advocacy. Congratulations to Horace Mann on the award, and on being a leader in the insurance industry with their progressive approach to customer experience management."
Jim Davies, Research Director for Gartner commented "The insurance industry is becoming highly commoditized. In this environment, companies can differentiate themselves by providing a compelling and consistent customer experience. By embedding a surveying dimension within core customer processes as part of an enterprise wide feedback management strategy, organizations can go a long way to achieving this - providing that the feedback is acted on."
About Horace Mann
Horace Mann is the largest multiline insurance company in the United States, focusing on educators' financial needs by providing auto and homeowners insurance, retirement annuities, life insurance and other financial solutions. Founded by educators for educators in 1945, the company is headquartered in Springfield, Ill. For more information, visit http://www.horacemann.com.
About ResponseTek
ResponseTek is the leader in on-demand Customer Experience Management (CEM) solutions, transforming the voice of the customer into actionable business intelligence. Using ResponseTek:CEM, Global 1000 corporations like Aon, HSBC, Lastminute.com and Xerox measure and report on customer experiences, capturing insights on customer experiences when and where they occur, and delivering them continuously and in real-time. For more information about ResponseTek CEM solutions, visit http://www.responsetek.com.
SOURCE ResponseTek
Copyright (C) 2008 PR Newswire. All rights reserved
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