Arjun Singh Rathore
In the competitive and capitalistic market consumer is sovereign and therefore the bank and the bankers must reengineer their views and recognize the predilection and tang of the retail customers.
The consumer behaviour has moved, and infact it is still moving a very fast drastic behavioural change. Till the beginning of 21st century for any consumer product going out of order both the consumer, was having time, and the technician in the market, was having expertise to repair the product, especially, TV, Refrigerator, Computer, Watch, Mobile, etc. In the first two decades of 21st century the consumer’s affordability of weeks to ten days’ time got shrunk with drastic fall in the quality of technicians to repair, resulting into the replacement of the damaged part. But as of now especially in the post COVID era, with the opening of online platform, the consumer doesn’t have the time, forget about the repair or replacement of damaged part, they don’t even afford to visit the showroom to select a product, has resulted into opening of the online retail consumer market with a bang for both off-line and online retail banking operations in India.
Also known as personal banking, retail banking deals with individual customers and their work like managing their money, giving them access to credit and debit services, etc. Retail banks offer products like Saving Bank Accounts, Daily Deposit Accounts, Recurring Deposit Accounts, with no-frills along with debit cards (ATM/RuPay Card) to the general public. It also offers services like lending various loans such as home loans, gold loans, educational loans, car loans, consumer loans, etc. These retail banks also offer mortgages and fixed deposits (FDs). The banking that takes place between your personal bank and you is nothing but retail banking. All the banking services that you enjoy from your bank including your personal accounts, saving accounts, loans and even online banking services fall under retail banking. Hence the future of retail banking holds significant importance.
Back in the day, retail banking meant physically going to a bank branch. People had to visit in person to do things like deposit money, open accounts, and get different banking services. Everything was documented on paper, and people had to keep careful records of their account balances and transactions. This process took a lot of time and usually meant multiple visits to the bank.
Retail banking, also called personal banking or consumer banking, is financial services geared toward individual customers rather than large corporations. Retail customers of the bank include the general population. Even when you are availing banking service online, you are connecting with your bank on some level, making it a part of retail banking as well and as such working in retail banking requires high levels of customer service.
The 1990s marked a big shift in the Indian banking world. New technology came in, like computers and electronic databases. This made banking operations smoother, reducing paperwork and making transactions faster. It’s also when Automated Teller Machines (ATMs) were introduced. These let people get cash and do basic banking even after the normal bank hours.
The real game-changer came in the early 2000s with the spread of the internet and mobile phones. This sparked a digital revolution in banking. Banks began offering internet banking, letting customers do things like check their account balance, transfer money, and pay bills from their homes or offices.
With smartphones in the hands came the era of Mobile Magic, and the mobile banking took off. Banks developed easy-to-use apps that let customers do transactions wherever they were. Mobile banking made managing money super convenient, just a few taps on the screen and you’re sorted. Services like mobile wallets and peer-to-peer payments made sending money between people even simpler.
Retail banking has a huge market in India when aided by technological advancements. Provided the array of services they offer, they have the potential to capture a vast consumer section and also benefit themselves along with the common people. Since retail banks have been categorised to provide customised facilities to people of different areas, like rural and urban, it will benefit a large section of the Indian population.
One of the most important shifts was the push for financial inclusion. The government and banks teamed up to bring more people into the banking system. Initiatives like Jan Dhan Yojana aimed to give every household access to banking, insurance, and credit. These efforts expanded the bank’s customer base and helped fight poverty.
Retail banks are the one-stop destination for their customers to manage their financial conditions and the success of the move towards cashless payments got a big boost after the demonetization in 2016. People turned to digital payment methods because physical money was scarce. Online banking, mobile wallets, and platforms like UPI became popular for quick, secure, and cash-free transactions.
Now, banks are using AI to offer personalized banking experiences. Chatbots powered by AI help customers with questions, while data analytics lets banks understand what customers want. This lets banks offer tailored services and products, making customers happier.
Also, the credit lending facility of retail banks is a wonderful tool for many people to meet their urgent needs like education of their children, building houses, or even debt control. The provision of having financial advisors will give financial literacy to people, especially in rural areas, and have them gain control over their money.
Retail banks are mainly classified in four types Central Bank, Commercial Bank, Co-operative banks and Regional Rural Banks, falling under three categories of small bank, large bank and online bank. Operating on a small scale with smaller banks especially in rural areas is the backbone of retail banking. Large category banks although mainly operate in major and big cities, yet many retail customers especially among the lower, middle and upper middle class, opt for these banks. Online banks are the latest revolution in the banking sector, having no physical branches, are the future of retail banking in India.
Retail banking with a win-win position for both customer as well as the bank, is one of the finest divisions of the banking system that provides a wide variety of facilities to individual customers. It helps both kinds of customers who want to save their earnings as well as the ones who want to lend some money. The offerings have manifold with the involvement of technology. Also, the banking sector has to work on reducing the main hindrances that are leading to unsatisfied customers. The retail banking sector is poised to grow at a rapid pace by digitizing financial services dissemination, further formalizing credit to micro, small and medium enterprises (MSMEs), adopting innovative digital operating models.
So far Retail banking’s journey in India has been incredible, shifting from traditional ways to embracing digital innovations. The ease and accessibility of online and mobile banking have completely changed how we handle money. With AI and more tech advances, the future of banking in India looks promising, with even more personalized and efficient services. As India keeps advancing digitally, the banking sector will play a big role in shaping our country’s financial landscape.
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