But in the new paradigm post 2008, there are many shifts which make retail banking more important
- To avoid wholesale funding issues, banks have realized the importance of customer deposits. Retail banking achieves that, and the strategic importance as the net funds provider will grow, given the capital starved scenario in a post Basel III world. That way, it could still punch above its weight.
- Given the technology innovations, the existing branch infrastructure could be leveraged to deliver value adding services, with all routine services going online. How to do this, is one of the most exciting challenges of the 21st century.
- As the RBS UK retail banking head mentioned in an Apr-11 conference call(http://tinyurl.com/RBSApr11), When clients do go into branches they want real added value, so we need to make sure that the people are in there are good people. This has implications for talent mobility within the bank, recruitment strategies etc
- Retail banking is the 'catch them young' way to bank with future private wealth clients. Personally, I would prefer to bank with the bank which sanctioned loans when I needed them the most(education etc). This 'balance sheet backed' relationships is exactly how it works in wholesale banking too.