Training Manager's Guide To... Retail Banking
Discover the latest retail banking trends and the training required to stay on top of the changing landscape.
Retail banks provide a one-stop shop for consumers looking for financial services products and advice, providing services such as savings and current accounts, credit cards, loans, mortgages and investment products.
Customers historically dealt primarily with a local branch of a larger commercial bank, but interactions are increasingly taking place online and via mobile as technology within the area develops and adapts to consumers changing needs.
Important to know right now...
The retail and online banking landscape is constantly changing and evolving as new technologies come into play and increased competition, not just from other banks, but also other sources, for example, retailers who are entering the personal finance sphere, gives customers greater choice about where to put their cash.
According to the Jones Lange LaSalle Retail Banking 2020 report, technology will be a game changer for retail banking in the coming years as consumers continue to use online or even mobile banking as their main touch point. While the majority of banks already offer multi-channel services, the focus will be on seamless integration and going one step further than the competition. Well be taking a closer look at the developing role of online banking in more detail in a later article.
Banks need to focus on improved in branch experience; something which is often discussed but rarely actually delivered. Those banks which are taking action in this area are learning valuable lessons from major retailers and other non-financial companies.
Need to know key terms...
Distribution strategies is becoming something of a buzzword in the retail banking sector as the shifting demands of customers mean that banks need to provide multi-channel sales and service experiences to keep up with the competition. Traditionally products and services were distributed via the branch, but now banks are considering alternative face-to-face channels as well as mobile and online.
Customer centricity is increasingly important to retail banks as the competitive marketplace makes it difficult to retain customers. Being customer centric involves making the customer the focus of all interactions and striving to create a positive experience both at the point of sale and post sale.
Consumer credit risk, the risk that banks could lose out on money due to customers not paying debts including mortgages, credit cards and personal loans, is something that all banks need to keep a close eye on. Banks are looking at new ways of assessing what kind of credit risk people pose and minimising the risk they take on. There are also changes to the regulation of consumer credit to contend with in multiple jurisdictions.
Engagement preferences are something all retail banks need to consider. Improved technology has enabled banks to offer customers many new engagement channels, including online and mobile banking, but it is important to assess which channels customers prefer to use rather than focusing on ones which are less costly or more convenient. For example, while online and mobile banking has increased the number of times people interact with their banks from once a week to nearly once a day, research by Gallup shows that there are still some tasks people prefer to carry out in branch.
Who works in retail banking?
Strategic planning personnel Retail banks are increasingly investing their time and money in developing strong strategic plans; identifying potential risks which may impact business and brainstorming products and services which can be used to strengthen the banks offering to consumers.
Operations directors Operations directors, or chief operating officers as they are sometimes known, are responsible for ensuring that the day-to-day operations of the bank run smoothly. Main responsibilities include ensuring that the bank is working efficiently, handling logistics, preparing budgets and overseeing the supervision of employees.
Risk managers The risk managers primary role is to advise the bank on any potential risks to its profitability as a business. They can work across many areas including corporate governance, information and security risk, technology risk, and market and credit risk. Their role will involve evaluating risk levels, risk reporting and planning, designing and implementing the banks risk management process.
Compliance managers - Retail banks are subject to an ever-growing number of regulations, and its the job of the compliance manager to develop a compliance model that everyone from the most senior to junior staff members can follow, ensuring that all these regulations are met. They help manage all details of the banks operational activities including how customers are handled, the software used to process transactions and the day-to-day running of the business.
Distribution managers Distribution managers within retail banks are tasked with looking after the various ways banks distribute their products and services to consumers. The role is one which is in a state of evolution at the moment as banks look for alternative channels to the branch to communicate with customers and sell their services via.
Key challenges and common skills gaps
The increased competition within the retail banking sector means there are many challenges facing those working in the sector; two of the biggest being customer retention and customer engagement.
Banks need to ensure that they have the skills in-house to develop and design distribution strategies which meet the changing needs of their customers, whether they are online, mobile or face-to-face. Product development is also vitally important in helping banks stand out from the crowd and retain customers by demonstrating a deep understanding of their needs.
Ensuring staff have a strong knowledge of non-branch distribution channels such as mobile and online technologies and are aware how they will impact on traditional distribution networks is essential.