Nestle Pak istan

Consumer Banking

University of Central Punjab

Banking

Consumer banking a tool of poverty reduction &

socioeconomic development

Presented To: Proff. Akhter Hussain

Presented By: Muneer Hussian
Faisal Rasheed
M.Sadique Hakim
M.Amdan

L1s11bbam 2003
L1s11bbam 2093
L1s11bbam 2054
L1s11bbam 0143

Business Strategy

Nestle Pakistan

Introduction
We dont want satisfied customerswe want delighted customers. It is the new
marketing mantra today. The same applies to banking as well. Consumer banking and rural
banking were once considered as taboos by the leading foreign and domestic banks. But cutthroat competition, innovation and advanced technology have altogether changed the face of
banking sector. Now all banks have recognized the importance of Consumer banking.

Consumer banking is that part of a bank that offers products and services primarily to
individual customers, professional, self-employed individuals or small businesses. The focus is
on creating products and services that meet the needs of the target customers and are profitable
for the bank as well.

The approach to Consumer banking products is more on a mass production basis wherein
all risk and operations are based on and geared to cater to a large number of customers. This is
therefore, significantly different from corporate banking or wholesale banking where focus is on
large sized customer accounts rather than large numbers of customers.

Understanding Consumer banking will help in servicing your customer better as it would
give you a perspective and insight into how such products are structured and specific
requirements for each set of products. This would help you advice your customer in a more
informed manner besides making you a more informed consumer.
With the advent of ATMs, Anytime banking has come into picture. Satellites and
telecom networks across the world have made Anywhere banking possible. Now it is the turn
of Anyhow banking, and the leading bank of the next century will be the one which has all
these three As.

University of Central Punjab

Business Strategy

Nestle Pakistan

What Is Consumer Banking?

Consumer banking is however; quite broad in nature it refers to the dealing of commercial banks
with individual customers, both on liabilities and assets sides of the balance sheet. Fixed
current/savings accounts on the liabilities side; and mortgages, loans (e.g. personal, housing, auto
and educational) on the assets side are the more important of the products offered by banks.
Related ancillary services include credit cards, or depository services.
Todays Consumer banking sector is characterized by three basic characteristics.

Multiple products (deposits, credit card, insurance, investments and securities).

Multiple channels of distribution (call center, branch, internet and kiosk); and

Multiple customer groups (consumer, small business)

Definition:
Consumer Banking Services:Banking services provided to individual members of the public as opposed to those
provided to businesses and institutions.

WEAKNESS:1) Avoids corporate sector :

Consumer banking avoids corporate sector totally which is the backbone of Pakistan economy. However
bank can take certain step to manage their corporate clients such as lower arte credit, higher amount of loan
etc. Managing corporate client is more easily as they have well defined financial policy and project and
they concentrate on product and services offered rather than on CRM of bank unlike individual clients.

2) Marketing (Internal and External):

Consumer banking requires strong marketing strategies to be adopted by bank both internal and external.
Under Consumer banking segment top level management need employees to introduce product properly to
its employees because if the employees are not aware regarding the product they are offering that product

University of Central Punjab

Business Strategy

Nestle Pakistan

will fail however effective the product is also bank require to spend heavy amount on its marketing of
product to general public because if public is not aware regarding the product and service how will they
operate for it.
3) Changes in technology:
Consumer banking lies in the hand of IT such as E-banking, phone banking, ATM leverage the Consumer
banking product and service offered by banks. If banks are not able to adopt the latest technology it may
pull back the growth of bank also this technology requires lot of capital investment and if at all the
technology fails then it may shake the customers confidence on bank and bank may land up in losing its
customer.
4) Reduces the profitability:
Consumer banking increases overall profitability of the bank but in reality this is not the case because
managing wide range of product and service requires high quality technology, large number of staff and all
this requires high capital investment which reduces banks profitability.

5) Co-ordination among various department:

Success of Consumer banking is result of various departments together. If there is lack of co-ordination
among various department of the bank then however strong and effective the may be the product it will fail.
Suppose if the front office is successful in attracting the customer but back office is not able to execute the
delivery of product or service on time then bank may land up loosing the customer although its CRM was
effective.

University of Central Punjab