What are Corporate Credit Cards? – Different Types of Cards
February 12, 2025
The Asian financial crisis was another major currency crisis that happened during the 1990’s. The crisis assumed epic proportions. This is because it started in only one country i.e. Thailand whose currency faced an attack from speculators. However, in a very short span of time the crisis had gripped the entire South East Asian region. […]
Just like mergers and acquisitions, modeling for leveraged buyouts (LBOs) also requires special skill and knowledge. In this article, we will have a closer look at how leveraged buyouts work as well as how financial modeling techniques need to be adopted to meet the needs of investors indulging in LBO’s. What is a Leveraged Buyout? […]
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In the previous article, we have already understood the method used for deriving the discount rate which is used while deriving the valuation of sports franchises. The method was described in detail. However, even though theoretically, there is a method available to derive the discount rate, there are several practical issues that make it difficult […]
Once upon a time, investors and analysts used to believe in ratios that have been calculated based on the earnings that the company has stated in the Income Statement. Alas! That was once upon a time. Of late, there have been a huge number of frauds and malpractices that have come to the fore. All […]
In the previous article, we studied what relationship banking is and how it is different as compared to transactional banking. The relationship banking model has become very popular, particularly in the field of commercial banking. It is important to understand the pros and cons of relationship banking in order to have enough information to make a better decision.
The pros and cons of relationship banking have been mentioned below:
Relationship banking offers several benefits to its clients. The most popular benefits have been listed below:
Hence, the best way to provide personalized services is to ensure that a bank’s representative completely understands the business model of the corporate as well as their banking needs. Since commercial banking is not about selling standardized products, it is difficult to imagine any other model being used in such a context.
Hence, the relationship manager can help the corporation seamlessly follow the process. In many cases, they even perform administrative tasks on behalf of the client. Hence, clients have access to priority customer service and all their issues and queries are resolved in the shortest possible time. Since corporate customers are unlikely to stay with a bank unless they get top-notch service, relationship banking is an appropriate business model, given the situation.
The various disadvantages of relationship banking must also be considered while making a decision. Some of the major disadvantages have been mentioned below:
However, in reality, relationship bankers face a lot of pressure to increase their sales. As a result, they tend to push more and more products to the customer regardless of whether it is beneficial to the customer or not. Hence, having a relationship manager is like having a salesman within the premises of the company.
The fact of the matter is that relationship banking is the predominant business model as far as commercial banking is concerned. However, there are certain cons related to relationship banking that potential clients must be aware of.
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