Corporate vs. Retail Banking
Prasad Kaipa
Corporate vs. Retail Banking
• Small number of
customers
• Narrow client base
• Large value transactions
• Large number of
transactions
• Inter-bank transactions
• Larger sum of money
• Inter-bank markets
• Funds for business
undertakings
• Low cost of processing
• Mobilitation of deposits
for individuals
• Lending to small business
and retail local markets
• Large volume and low
value transactions
• Liabilities are mostly
related to various types of
deposits accounts
• Loan portfolio is
dominated by the
consumer loans
• High processing cost
• High level of customer
relationship
• Concept of a personal
banker
• Close attention and quick
service to customers
• Each customer has unique
requirements
• Custom solutions and total
service approach
• Moderate level of
customer relationships
• Range of options with
high technology
component
• Value differentiation
comes from customer
service
• Dedicated, highly
professional employees at
junior and middle
management level value
differentiation
• Product needs to be well
Transformation in retail banking
• In the past, customers were happy with moderateyield, low-risk and low-cost savings deposits
• New generation prefers to invest to build wealth,
• demand very high levels of convenience,
• expect better working technology,
• Require information and advice that can be acted
upon, and
• Prefer wide range of alternative products
• They are highly individualistic and require
customized solutions to what they perceive to be
unique needs
Role of information Technology
• It contributed to major upheaval in wholesale
banking though its impact on retail bank is
increasing.
• Technology based delivery channels such as ATMs
did not differentiate retail banks.
• Corporate clients are more familiar with
automation than retail customers in India.
• Internet banking has not taken root in India though
it is growing. It still represents a small % of
banking transactions.
Why move to retail banking?
• Downfall in the demand of credit
• Slackness in the economic activities
• To attract rich middle class with consumer
finance and housing finance products
• Increase lending business to growing
number of entrepreneurs and startups
Elements of Leadership:
Franklin D. Roosevelt
as illustrated by Prof. David Gergen (MS Thesis: Leadership perspectives (2003) by
Rajnish Jain)
• Second class mind but first class temperament (Justice Holmes, 1933)
• A contagious confidence in the future
• Capacity to relax, reflect, recharge
• Extraordinary Emotional Intelligence
• World-class communicator (Through the press, mass media and through symbolism
(knew how to avoid over-exposure)
• Consesual leadership style
• Skill in building coalitions (voters, members of congress and international allies)
• Set moral objectives and followed pragmatic means
• His strengths were his weaknesses (devious, secretive, manipulative and ruthless)
• Magnet for a strong team
• An Indispensable partner and co-leader: Eleanor
Roosevelt’s Rules of Leadership
•
•
•
•
•
•
•
•
•
•
•
•
Embrace “the strenuous life”
Learn to be fearless
Keep learning about life
Ride ahead of black care
In your ambition, focus on the job at hand
Exercise power to the hilt
Speak softly, carry a big stick
Choose and use your team wisely
Know right from wrong
Charisma (and publicity) help
Face the future with indomitable optimism
Serve Others
Roosevelt quotes
•
•
•
•
•
Strenuous life: I wish to preach, not the doctrine of ignoble ease, but the doctrine of the
strenuous life, the life of toil and effort, of labor and strife; to preach that highest form of
success which comes, not to the man who desires mere easy peace, but to the man who does
not shrink from danger, from hardship, or from bitter toil, and who out of these wins the
splendid ultimate triumph.
Being Fearless: There were all kinds of things of which I was afraid at first, ranging from
grizzly bears to ‘mean’ horses and gun-fighters; but by acting as if I was not afraid I gradually
ceased to be afraid. Most men can have the same experience if they choose. They will first
learn to bear themselves well in trials which they anticipate and which they school themselves
in advance to meet. After a while the habit will grow on them, and they will behave well in
sudden and unexpected emergencies which come upon them unawares.
Learning: As soon as any man has ceased to be able to learn, his usefulness as a teacher is at
an end. When he himself can’t learn, he has reached the stage where other people can’t learn
from him.
Indomitable optimism: Life brings sorrows and joys alike. It is what a man does with them--not what they do to him---that is the true test of his mettle.
Serve others: The Man in the Arena---It is not the critic who counts; not the man who points
out how strong man stumbles, or where the doer of deeds could have done better. The credit
belongs to the man who is actually in the arena, whose face is marred by dust and sweat and
blood; who strives valiantly; who errs, and comes short again and again, because there is no
effort without error or shortcoming; who knows the great enthusiasms, the great devotions;
who spends himself in a worthy cause; who at the best knows in the end the triumph of high
achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his
place shall never be with those cold and timid souls who know neither victory nor defeat.
Principles of Officership
• Duty
• Loyalty
• Honor
• Competence
• Subordination
• Honor
• Service to country
• Teamwork
• Leadership
---West Point model of leadership
West Point Training and
Leadership Model
BE
Educate
Know
Do
Inspire
Develop
Train
Leadership As Calibration
Larry Summers, President,
Harvard University
• Rule #1: The world is an uncertain place, and one must be quite uncertain as to
how world events will play out. (proper decision- making requires recognizing
the probabilistic elements and recognizing multiple uncertainties.)
• Rule #2: Make decisions with a long-term horizon but with the awareness that
you need to get through the short term.
• Rule #3: Decide when you need to decide. Don’t decide because someone else
wants you to. Always preserve the ability to make choices later.
• Rule #4: Make sure you hear the voice contrary to the one you are inclined to
favor. If somebody suggests doing “x”, he likes to ask “ what are the best
reasons not to do X?”
• Rule #5: With any people the more people employed to proffer insight and
solutions, the better.
From Leadership, Winter 2003 -- a summary of Harvard University Leadership
Roundtable, Spring 2002.
Managing vs. Leading
Plan
Vision
Organize
Control
Align
Motivate
Values
Direction
Involvement
What Leaders Do based on
Jim Fisher, Dean, Rotman
School of Management, U
of Toronto
Key elements of persuasion
• Credibility that assures
• Empathy that bonds
• Explanations that inform
• Logic that convinces
• Words and ideas that inspire
--- David Gergen as quoted by Rajnish Jain in
his MS Thesis (2003)
Participative Decision-making
Autocratic
Decision
No influence
by others
Consultation
Joint Decision
Delegation
High influence
by others
Source: Rajnish Jain 2003 from Yuki
How U.S. Banks Stack Up
in 2004
• Citigroup
$1.19 trillion
• J.P. Morgan-Bank One
$1.1 trillion
• Bank-America-FleetBoston $966.4 billion
• Wells Fargo
$369.6 billion
• Wachovia
$364.3 billion
• Washington Mutual
$241.9 billion
• U.S. Bancorp
$194.9 billion
• National City Corp.
$123.4 billion
• SunTrust Banks
$120.9 billion
• Bank of New York
$99.6 billion
compiled by American Banker --Assets as of 6/30/03
Leadership
• A prince….ought to choose the fox and the
lion; because the lion cannot defend himself
against traps and the fox cannot defend
himself against wolves. Therefore, it is
necessary to be a fox to discover the traps
and a lion to terrify the wolves. Those who
rely simply on the lion do not understand
this. -- Machiavelli, The Prince (1513)
Guidelines for transformational
leadership (Yuki 2002)
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•
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•
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Articulate a clear and appealing vision
Explain how the vision can be achived
Act confidently and optimistically
Express confidence in followers
Use dramatic, symbolic actions to emphasize key
values
• Lead by example
• Empower people to achieve the vision
Crucibles of Leadership
(Bennis and Thomas 2002)
• Adaptive Capacity
–
–
–
–
• Voice
Hardiness (transcend adversity)
– Purpose
First Class Noticer
– Self-awareness, selfconfidence
Learning
– EQ
Proactively seizing
opportunities
• Integrity
– Creativity
– Ambition
• Engaging Others by Creating
– Competence
Shared Meaning
– Moral compass
– Encourage dissent
From interviews of extraordinary achievers under
– Empathy
35 (geeks) and over 70
– Obsessive communication
(geezers)
EQ Vs. IQ
• 90% of the difference in the profiles of star
performers with aver average ones in senior
leadership positions was attributable emotional
intelligence rather than cognitive abilities. -Daniel Goleman based on research at nearly 200
large, global companies.
• Woodrow Wilson is the only US president who
has had a ph.d.
Spiritual Leadership
• Worldview—underlying beliefs by which a
leader views and brings forth into the world.
• Authenticity— genuineness based on a
principle-oriented approach.
• Mastery—pursuit of mastery of self and
others.
• Service—action based on an other-focused
approach.
Authenticity
1. Communication—defined as the leader’s ability to
effectively exchange information, objectives, and vision
with followers.
2. Connection—defined as a bond between leader and
followers based on the leader’s ability to affiliate at the
followers’ level.
3. Consistency—defined as a leader’s ability to retain
constancy in words, deeds, and actions with minimal
variation.
4. Conviction—defined as the leader’s firmly held belief in the
vision.
Authenticity
5. Courage—defined as the leader’s ability to stay true to the
vision and course of action regardless of sacrifice,
difficulty, or uncertainty.
6. Equality—defined as equal opportunity and treatment
among followers in relation to the vision.
7. Exemplar—defined as the leader’s ability to be an ideal
example of those principles fundamental to his worldview.
8. Values—defined as the core qualities demonstrated by the
leader.
9. Vision—defined as the leader’s future ideal for self and
followers.
Soulful Leadership Model Kathleen Fleming Dissertation 2004
Service
(other-focused)
Worldview
(transcendent-focused)
Mastery
(inner-directed /
other-focused)
Authenticity
(inner-directed /
other-focused)
Soulful Leadership Model
Kathleen Fleming Dissertation 2004
Worldview
Belief in transcendent
Spiritual Practice
Change
Interconnectedness
(transcendentfocused)
Service
Mastery
Authenticity
Leader
(innerdirected)
Follower
(otherfocused)
Consistency
Conviction
Courage
Values
Vision
Self-Mastery
Teacher
Communication
Connection
Equality
Exemplar
Mu
Humility
Servant
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