The Future of Retail Banking
Though at present Retail Banking appears to be the best bet for banks to improve their top and bottom line, yet the future of Retail banking in general, may not be all roses as it appears to be.
There are signs of slowdown in customer growth in some countries, which will inevitably have an impact on Retail Banking business growth.
Secondly the possibility of deterioration in asset quality cannot be ruled out.
With the boom in housing loan market, the sign of overheating has also started surfacing with potential problem for banks that have not exercised sufficient caution.
Further the pressure on margins is mounting partly because of fierce competition and partly as a result of falling interest rates environment which has diminished to some extent the endowment effect of substantial deposit bases from which most retail banks have been deriving benefits.
But banks, which have built a significant retail banking portfolio may fare relatively well in the current fiscal.
Those banks which have a dynamic retail strategy and are well diversified in products, services and distribution channels and have at the same time managed to achieve a good level of cost efficiency are the ones that are most likely to succeed in the longer term.
Though at present Retail Banking appears to be the best bet for banks to improve their top and bottom line, yet the future of Retail banking in general, may not be all roses as it appears to be.
There are signs of slowdown in customer growth in some countries, which will inevitably have an impact on Retail Banking business growth.
Secondly the possibility of deterioration in asset quality cannot be ruled out.
With the boom in housing loan market, the sign of overheating has also started surfacing with potential problem for banks that have not exercised sufficient caution.
Further the pressure on margins is mounting partly because of fierce competition and partly as a result of falling interest rates environment which has diminished to some extent the endowment effect of substantial deposit bases from which most retail banks have been deriving benefits.
But banks, which have built a significant retail banking portfolio may fare relatively well in the current fiscal.
Those banks which have a dynamic retail strategy and are well diversified in products, services and distribution channels and have at the same time managed to achieve a good level of cost efficiency are the ones that are most likely to succeed in the longer term.