Business Model For Retail Financial Institutions Essay

In today’s society and in the future, everything is fast paced, technology is constantly changing and advancing, which means new equipment and services are always coming about. As a company that strives to better our customers, we are always purchasing new

Banks that can offer a multitude of consumer products and acquire customers through branches will continue to own customer acquisition and product distribution advantage over the coming years

despite a shift in customer base toward retail customers, which the current information system reports are more profitable than business customers. Following a stepby-step approach, you will develop the Bank’s average cost of serving a retail customer account and a business customer account, under (1) the Bank’s traditional

Retail banking is quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. Today’s retail banking sector is characterized by three basic characteristics:

Change is inevitable with dynamically advancing technologies and market trends. This paper proposes some evolutions for current business model of Best Buy Co. Inc.

Retail banking is the cluster of products and services that banks usually provide to consumers and small businesses through branches, the Internet, and various channels. “Bank of America serves more than 38 million consumer and small business relationships in the nation’s fastest-growing and most diverse communities. Sales, service, and fulfillment are provided through more than 5,800 banking centers and nearly 17,000 ATMs in 29 states and the District of Columbia. We also offer our customers the leading online banking service in the United States, with more active online bill payers than all competing banks combined, as well as a 24-hour telephone banking service that earns high ratings for speedy and easy self-service”. Bank of America

Commerce Bank leadership built their bank around the philosophy of creating a retail experience for every customer. While other banks were competing on price, Commerce recognized that their prices were not the cheapest in the industry so they had to differentiate themselves in a different manner. The organization’s founder, Vernon Hill, really sought out to understand what factors affected customers leaving their bank and what key reasons lead to their dissatisfaction. He used that information over the years to create a successful service model that would ultimately set Commerce Bank apart from other banks.

Product innovation – Since all banks are offering similar products therefore differentiation is important for future survival.

The business environment is changing rapidly and everybody wants a piece of the pie. Further, companies are fiercely competing for the greater piece of the pie by expanding aggressively beyond their current geographies, exploring virgin and new markets, forming

“Bank fees. Few words evoke consumer vitriol faster. Dissatisfaction with escalating checking and ancillary fees for banking services is making competition for customer loyalty in retail banking especially high. Research shows that great service can play a key role in customer retention throughout these changes in fee structures” (Logan, 2012). The financial industry is an integral part of the country’s financial system. Banking centers provides consumers with the resources to be able to secure, save, and manage their balances. The bottom line is that banks provide products that are analogous to its competitors; however, the differentiation that denotes the industry leaders and lags in this industry is method used for the service is being rendered to consumers. Therefore, we will discuss and evaluate the operations management at Commerce Bank. We will start by discussing the reasons why Commerce may no longer be fulfilling its operational potential for finding innovative means for surpassing organization objectives. The paper will outline the common constraints and common goals to improve the business model. Furthermore, the problems and issues within the customer relationship initiative and prospective solutions to these issues will be reviewed. We will identify the existing problems through data and propose recommendations.

Banking industry and financial institutions nowadays facing rapid change. Customer behaviour, retention, technology, regulatory compliance and competition from existed competitors and quick and innovative upcoming competitors are all in flow.

retailers and is a prime example of a business that has responded to changing customer needs throughout its history. It

Identify and critically appraise the main trends that have taken place in corporate and wholesale banking over the past twenty years or so. In your answer make a critical appraisal of the effect these trends have had on the nature and structure of the industry

Our case study is on the Columbia City Bank. First of all we would like to talk about the general inner workings of a bank. A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. In recent history, investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees, primarily loan fees but also including service charges on an array of deposit activities and ancillary services. Lending activities, however, still provide the bulk of a commercial bank's income. Beside, Banks make money from card products through interest payments and fees

The core reason for the segmentation of retailed banking sector is to develop a model that will reach beyond mere cross selling and contribute towards offering life cycle based products for the customer and establish the need to understand customers’ needs comprehensively.