Business of Retail Banking

The retail banking sector is perhaps the least glamorous part of the banking world. However, retail lending can often be more important to a bank than the corporate equivalent. Furthermore, for the vast majority of people, retail banking is banking. Where are salaries paid to? Where are the ATMs? Who is going to extend credit when somebody wants to buy a house or a car? The answers to these questions may not seem exciting, but they emphasize how retail banking contains many key strands in the financial web of sophisticated modern economies.


This course looks at the role of modern retail banks. The key issues addressed include the structure of the retail banking sector, the product offerings, the drivers of profitability, and the role of regulation.


    On completion of this course, you will be able to:

    Describe how retail banking structures have evolved across the globe

    Describe the product and services offered by retail banks, including savings products, money transmission and payment systems, and credit extension

    Identify the sources of profitability for a retail bank

    Explain the measurements generally used to assess performance in retail banking

    Outline the key aspects of regulation relating to retail banking


    Topic 1: Overview of Retail Banking

    Definition of Retail Banking

    Importance of the Retail Area to Banking Institutions

    Retail Banking Market Structure

    Forms of Ownership

    o Private

    o Cooperative/Mutual

    o State

    Distribution Channels

    o ATMs & Self-Service

    o Post Offices & Supermarkets

    o Internet & Phone

    Topic 2: Key Retail Banking Businesses

    Saving Money

    o Transactional Accounts

    o Savings Accounts

    o Government Savings Vehicles

    o Structured Deposits

    o Money Market Funds

    o Bancassurance

    Moving Money

    o Cash

    o Checks & Giros

    o Direct Debits/ Credits & Standing Orders

    o Card-Based Payments

    • Credit Cards

    • Charge Cards

    • Debit Cards

    • Prepaid Cards

    o e-Commerce Payments

    o Mobile-Based Payments

    o Wire Transfers

    o Payment Systems/Networks

    o Bank Account Identification

    Extending Credit

    o Overdrafts

    o Consumer Loans

    o Mortgages

    o Home Equity Loans (HELs) & Second Mortgages

    o SME Lending & Microfinance

    o Managing Retail Credit Risk

    Islamic Banking

    Topic 3: Sources of Profit

    Interest Income

    o Fixed vs. Variable Rates

    o Net Interest Margin (NIM)

    Non-Interest Income

    o Originate-to-Distribute

    Topic 4: Assessing Performance

    Return on Assets (ROA)

    Return on Equity (ROE)

    Cost Income Ratio (CIR)

    Topic 5: The Importance of Regulation

    Identifying the Regulator

    Types of Regulation

    Deposit Insurance

    Capital Adequacy

    Consumer Protection

    Changing Regulatory Environment



    75 Minutes

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