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Also known as personal banking, retail banking deals with individual customers and their work like managing their money, giving them access to credit and debit services, etc. It also offers services like lending various loans such as home loans, gold loans, educational loans, etc. These retail banks also offer mortgages and fixed deposits (FDs). Hence the future of retail banking holds significant importance.
Retail banks are the one-stop destination for their customers to manage their financial conditions, which includes either saving money, withdrawing money, or even lending money. These retail banks have also introduced the provision of having financial advisors who provide the best financial advice to the retail customers.
The main point of differentiation between retail and non-retail or corporate banks is that corporate banks deal with businesses and governments while retail banks deal with individual customers.
Types of retail banks
Retail banks can be classified into four types, namely:
1. Commercial banks.
2. Regional Rural Banks.
3. Post Office.
The advantages of Retail Banking
The main advantage of retail banking is the huge customer count due to the large variety of services provided through these banks. These banks also provide better pricing and profitability and have a scope of cross-selling. Since it deals at an individual level, it offers better facilities than corporate banks.
Retail banks provide an ideal platform for the development of funds. Retail banking is one of the finest options when it comes to stabilising the national economy. It also helps in maintaining a balance between different economic sections of society. Also, very less marketing effort is needed in retail banking. It is a platform to design and create innovative products that benefit common people financially and help them achieve financial momentum.
Technology in Banking
The use of technology in the banking sector has eased the process of banking to a large extent. Now, using various apps or websites, people can transfer money, pay their bills, check on their transactions, etc. In other words, with the help of the internet, people can enjoy banking facilities anytime, anywhere.
Technology has also relieved people from standing in long queues to check their transactions and manage their accounts. Transferring funds or paying bills has been made too easy through various finance apps, including Phonepe, GooglePay, etc. Few companies like Paytm have also given us the confidence to go cashless with confidence.
These technical advancements have also reduced the burden of carrying large amounts of cash when necessary, as payments are now easily being made by scanning QR codes. QR codes are unique to each seller or shop, and it is directly connected to their bank account. So, when the code is scanned and payment is made, it instantly gets transferred to their bank account.
The Future of retail banking
Retail banking has a huge market in India when aided by technological advancements. Provided the array of services they offer, they have the potential to capture a vast consumer section and also benefit themselves along with the common people. Since retail banks have been categorised to provide customised facilities to people of different areas, like rural and urban, it will benefit a large section of the Indian population.
Also, the credit lending facility of retail banks is a wonderful tool for many people to meet their urgent needs like education of their children, building houses, or even debt control. The provision of having financial advisors will give financial literacy to people, especially in rural areas, and have them gain control over their money.
The future challenges for Indian Banks
There are several disadvantages faced by both the bank and the customers. For instance, many people take loans and do not repay them, thus leading the bank to lose funds. Many banks are very slow in providing accurate services at the appropriate time.
The use of technology has also resulted in several problems like server breakdowns, slow network connections, etc., leading to unhappy customers and negative feedback. Services of mutual funds provided by these banks tend to addict a significant section of customers, many of whom lose their money due to market value downfall. So, the main challenge is to overcome these hurdles and provide customer satisfaction.
Conclusion
In this article, we came across the future of retail banking, the advantages of retail banking, the facilities offered by retail banks, the difference between retail and corporate banks, its future in India, and its technological impact.
Retail banking is one of the finest divisions of the banking system that provides a wide variety of facilities to individual customers. It helps both kinds of customers who want to save their earnings as well as the ones who want to lend some money.
The offerings have manifolded with the involvement of technology. Also, the banking sector has to work on reducing the main hindrances that are leading to unsatisfied customers.
