What is the relationship banking?

Relationship banking is a process that involves active anticipating the needs of individual customers and taking steps to satisfy these needs before the client introduces them. The basic concept of this approach is related to the development of more comprehensive work relations with each client, evaluation of its individual situation and submitting proposals for various services offered by the bank to help improve the customer's financial well -being. This approach is often associated with smaller banks that use more personal approach with customers, although the growing number of large banking corporations is beginning to support similar strategies at local branches.

In the root of relationship banking, the idea that institutions and individual customers are partners with a common goal: improved customer financial security. For the reason that representatives of clients' support within the bank are constantly trying to understand what customers are doing and dislikeIt is about the services offered by the bank, how they are presented and how to find out which of these services will probably be beneficial for every customer. This type of proactive approach is very different from a reactive approach, which has been using many banks over the years, in which the bank basically sets up its set of services and qualifications for obtaining them, and then passively waits for customers to approach them. The institution representatives do not wait for the relationship banking until customers come to them; They go to customers with an action plan.

traditionally smaller banking institutions effectively used relationship banking as a means of competition with large banking corporations. Focusing on personalized service, encouragement of employees and officers to recognize customers when they entered the establishment and time to recommend services that are very likely to be very useful for each customer, the local bank can often maintain a solid clientele, although a large conglomerate on the street offers the streetWhat appears on the surface to make them competitive and great mortgage offers and other loans. In fact, the local bank can be able to compare these rates and without some hidden fees and requirements found with a major problem.

There are advantages and disadvantages of access to the relationship. One advantage is related to getting information into the hands of customers that will be very likely to lead to better financial outlook for each of these customers. Since the bank brought this information to the client instead of waiting for the client to ask for it, there is an increased chance that the customer will feel more like an individual and less as a statistics for the bank. At the same time, some customers can withstand relational banking, the feeling that this personal approach is nothing but sales tactics, designed to attract the client to open accounts they do not need, and undertake to pay for services they do not want. If this is the case, the approach controlled relationships can realizeSTI cause the customer to leave rather than strengthening the relationship.