Relationship Banking

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . 3

Statement of the Problem . . . . . . . . . . . . . . 3

Importance of the Study . . . . . . . . . . . . . . 7

II. UNDERSTANDING RELATIONSHIP BANKING . . . . . . . . . 8

Relationship Banking: Definition and Explanation . 8

Elements Required for the Successful

Implementation of the Relationship

Banking Concept . . . . . . . 9

Market Segmentation . . . . . . . . . . . . . . . . 9

Core Services . . . . . . . . . . . . . . . . . . . 14

Relationship Pricing . . . . . . . . . . . . . . . . 20

Personal Account Representative . . . . . . . . . . 23

Communications Management . . . . . . . . . . . . . 25

III. IS RELATIONSHIP BANKING REALLY NECESSARY? . . . . . 26

IV. COST-CUTTING AND RELATIONSHIP BANKING . . . . . . . 28

V. SUMMARY . . . . . . . . . . . . . . . . . . . . . . 30

VI. CONCLUSION . . . . . . . . . . . . . . . . . . . . . 33

REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . 34

This study examined the concept of relationship banking as a strategy for the 1990s. Specifically, this study sought an answer to the following question: In the dynamic contemporary banking environment, which is characterized in part by volatile interest rate margins, can the relationship banking concept be implemented as a successful strategy to enhanc

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easurability, accessibility, and substantiality (DeLozier & Woodside, 1988, p. 142). Accessibility refers to the degree to which a marketing organization can effectively reach a specific target market, while substantiality refers to the size and potential profitability of a specific target market. Measurability refers to the degree of accuracy to which required factors related to a specific target market may be measured and to the cost involved in the accomplishment of such measurement. The factor areas in which measurement must be accomplished are market demand and market potential. From the measured market demand and market potential, the demand and potential for the specific marketing organization must be developed. Obviously, information is at a premium in the performance of marketing segmentation tasks. The required elements extend to the competitors of a specific marketing organization. Such information is essential in the development of organizational demand and organizational potential. Segmentation for relationship banking is concerned with psychographics (Private banker's guide. 1989, p. 5). The best source of both information required for segmentation, and the customer base for relationship segmentation is a
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Approximate Word count = 7596
Approximate Pages = 30 (250 words per page)

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