What are Corporate Credit Cards? – Different Types of Cards
February 12, 2025
The dividend discount models assume that the investors have no control over the payout policy of the firm whatsoever. This is true for the case of the minority shareholder. Hence, it is said that as far as the minority shareholder is concerned, dividend discount models may be the best tools for valuing a firm. This […]
In the previous article, we have already read about cryptocurrency forks. We now know that a cryptocurrency system is basically software. Just like the software on our phones and laptops cannot stay static, the software responsible for cryptocurrencies cannot stay static either. It needs to be changed from time to time. The changes are done […]
The retail sector has some unique financial needs. There are various types of retail establishment across the world which use different types of arrangements to fund their day-to-day capital needs. The larger and more sophisticated retail chains have access to formal loans from banks. However, this may not be the case for small and medium […]
Economists all over the world are of the opinion that markets are the best system for allocating scarce resources. However, they do not seem to agree so much on what the nature of those markets should be? Countries like the United States, Japan, and France, etc. all do follow the market structure. However, there are […]
We are already aware that pension funds control a significant amount of investment funds across the world. The total amount of money controlled by pension funds runs into trillions of dollars. However, historically pension funds have shied away from investing in real estate. Pension funds are generally invested in asset classes such as equity or […]
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.
Your email address will not be published. Required fields are marked *