What are Corporate Credit Cards? – Different Types of Cards
February 12, 2025
Traditional financial analysts would consider a negative working capital i.e. having more current liabilities than current assets, a sign of imminent danger. This view was deep rooted in the belief that a company must always have sufficient cash on hands to meet its short term liabilities failing which the credit will dry up and the […]
Uber and Pinterest are amongst the hottest tech start-ups in the world right now. This is why the fact that both of these companies have chosen the New York Stock Exchange (NYSE) to list their shares on is being seen as great news for the exchange. The NYSE has beaten the NASDAQ as well as […]
We have already discussed that sports leagues across the world follow the franchise model. Franchising is at the core of billion-dollar sports leagues which take place across the world. It is important to realize that franchising provides the legal and business framework which ensures coordination between the actions of different league participants. It is important […]
Annuities can be divided into two types based on the exact time when the payments occur in a given period. The payments could either occur at the beginning of every period or the payments could occur at the end of every period. For instance when you take a house on rent, the rent is usually […]
Apple Inc. is the largest and the most profitable company in the entire world. However, of late, it has also found itself in the middle of several lawsuits. The company has been facing a legal battle with Spotify of late. However, none of the legal battles even come close to the legal drama that is […]
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 *