Retail banking

The standardized retail banking or retail business (english retail banking from retail, retail ') is a part of the private banking activities of banks. In contrast to Private Banking, part of the private banking activities of banks is also ( and is aimed at high net worth individuals ) are the standardized retail banking no individual solutions, but the sales of standard products in the foreground. It is understood as a product-or production- centered, standardized mass market with lot of customers who have only a low to no income. As a contrast, is defined as the wholesale or interbank market as a wholesale business.

Components

Significant aspects of retail banking are

• Account management and payments, and credit cards
• Investment instruments, such as savings accounts, call and term deposits
• Securities business
• Loans such as installment loans and mortgages

Then there is the distribution of home loan contracts, mutual funds and insurance.

Compared to the corporate business as well as private banking, the volumes of the individual transactions are relatively low. In turn, high volume to be processed. For this reason, highly standardized products are offered instead of individual solutions.

In retail banking, the deposits higher than the loans. This represents the private client business in universal banks also a distribution channel for securities represent that emits the bank for the customers of the corporate area.

Distribution channels

The distribution in the standardized retail banking is done through various distribution channels:

• Its own branch network
• On representative networks
• Over the telephone banking
• Or via the Internet Banking.

The sale is for the retail business a significant cost item dar. Therefore, banking products, which do not require a stationary distribution ( without consultation), typically cheaper.

In the retail business are significant to generate higher margins than in business with corporate customers. This also reflects the cost situation of the segment.

The market

In the UK there is an oligopoly in the retail business fewer suppliers who make little competition and therefore can realize high margins in the retail business. The counter-example currently exists in Germany, which has a high density of bank branches in the retail business. A variety of different providers of savings on cooperative banks, large banks to the exclusive private banks compete intensely on the market.

Switzerland

Retail banking accounts for a larger share of the total banking business, since one can assume that a bank serves far more residential customers than corporate customers. So here are many employees who are the customers advice and information, because a large part of the profit of banks from the retail bank, which is the business with private customers, generated, so that the investment in a large number of employees is certainly worthwhile.

From the current financial crisis, the retail banking is not large affected. The Swiss bank customer will pay up to the equivalent of CHF 200 for the daily services of the Bank and is therefore a global record holder.