What Is Retail Banking? (With Career Opportunities)
By Indeed Editorial Team
Published 13 September 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Retail banking is an important aspect of an individual's daily life that deals with savings, credit and general money management. Unlike other types of banking, retail bankers work directly with individuals, offering financial advisory services and executing transactions. Understanding retail banking and the important components of a retail bank can help you determine if this is a suitable career path for you. In this article, we explain what retail banking is, list the functions and products offered by a retail bank and provide the career opportunities and skills required for a career in retail banking.
What is retail banking?
Retail banking, also called personal or consumer banking, offers banking services to customers instead of institutions, like businesses or governments. They provide personal financial services that include savings and current accounts, insurance, credit cards, mortgage, loans and investments. The customers make use of their local or regional branches, or online network to avail the services offered by retail banking.
What are the functions of retail banks?
Create money supply in the economy: The banking cycles of lending and borrowing ensure there's always enough supply of money in the economy.
Create a safe place for cash deposit: Retail banks provide a secure and safe place for cash deposits and make money management more effortless. They also offer additional financial services and products that give a better rate of return on the deposited money.
Give credit to encourage consumer spending: They offer credit for consumer spending in the form of credit cards, home loans, education loans and vehicle loans to encourage spending.
Assist with the revival of the economy: Retail banks help reduce the cost of borrowing by providing competitive interest rates. As a result, they increase interest rates on loans during economic booms and reduce interest rates to spur consumer spending during the recession.
Provide personalised banking services: Retail banking provides customised financial services based on the preference and capability of the customer.
Products and services offered by retail banks
Retail banks handle the finance aspect of daily spending and significant life events, such as attaining higher education, buying a new home or buying a new car. Common products and services that retail banks offer include:
Bank accounts: This includes saving accounts, current accounts and money market accounts. These form an important part of retail banking, used by almost all the bank's customers.
Credit cards: These are quite similar to debit cards and allow you to buy goods and services now and pay for them later. They represent a loan that you're required to pay back, and if the customer does not pay the final amount within the grace period, they may incur late fee charges.
Safe deposit boxes: These are secure storage spaces where customers can store small valuables or essential documents within the bank to keep them safe.
Home mortgage loans: Home loans help customers to buy or refurbish a home. Based on the individuals' needs and preferences, retail banks offer a wide range of mortgage plans with flexible repayment methods and preferential interest rates.
Personal loans: A customer may require a personal loan for an investment or to help during an emergency. These loans don't require the customer to pledge collaterals.
Auto loans: These types of loans help people to buy or refinance a car.
Career opportunities in retail banking
Career opportunities in retail banking can be fulfilling and rewarding. The options are quite varied but also fairly hierarchical. Many people start their careers as bank tellers and work their way through challenging and exciting positions in the retail branch. You can choose a suitable career path based on your skill set and aspirations. Here are some typical jobs in retail banking:
Customer service advisor
A customer service advisor, also called a bank clerk, is an entry-level position in retail banking. In this role, you're a customer's first point of contact. Thus, customers may expect you to assist them with basic queries and direct them to different specialists in the bank.
A cashier is responsible for all money-related activities at the bank. For example, you can help customers cash a cheque, make a payment, set up a direct debit or do any other transactional activity. These professionals may greet customers, answer questions and assist them with various banking tasks.
Financial advisors, or mortgage advisors, provide advice to customers about various personal finance products and services offered by a bank. You may develop expertise in a particular product that you're selling, such as mortgages, loans or credit cards. You may also conduct interviews and perform assessments of customers to help them choose the best product or service according to their needs.
As you gain experience, you can get promoted into managerial positions that include being a branch manager, regional manager and area manager. A branch manager oversees the daily operation of one or more bank branches, trains and manages the staff, and conducts sales and marketing campaigns. The regional manager handles all the branches in a particular region of the country.
As you further grow along your career path, you can also occupy higher management roles within the retail banking sector. In such positions, you may be responsible for overseeing the overall retail banking activities. You may also determine the bank's products and services, decide on the bank's public image and manage stakeholder expectations.
Skills required to begin a career in retail banking
To begin a career in a retail bank, you may develop a specific set of skills and competencies. Here are some of the top skills required for these positions:
Excellent verbal and written communication skills can help you handle customers and colleagues. You may use these skills to convey complex information in a jargon-free and professional manner. It's important to tailor your communication style accordingly.
Customer service involves communication and problem-solving skills, along with the ability to listen and empathise with them. Understanding how to build relationships is a key factor in achieving and retaining lucrative business partnerships. Having previous experience in customer service and sales positions can also be useful in securing a job in the retail banking industry.
Many financial institutions try to build relationships with their customers and clients. Emotional intelligence plays an important role in successful customer relationship management. Learning about emotions, like empathy and compassion, may help you foster positive professional relationships during your career.
Leadership skills are one of the essential skills a banking employee can possess. These skills can help you lead a team, make strategic decisions and give clear direction to achieve the goals of a team.
During an interview, prepare for questions about occasions where you demonstrated leadership skills in your college or previous work experience. When you face such a question, prepare to respond, keeping in mind the following points:
Why did you take action?
What steps did you take to resolve the issue?
How did you arrive at a decision?
What was the outcome?
Numeracy skills imply that you've got the knowledge and ability to work with numerical and graphical information, draw conclusions and interpret your findings. Some retail banking positions require you to have a related degree in economics, statistics or mathematics. Other retail banking employers may not require this, but a strong numerical ability is often beneficial for succeeding in this role.
Organisation and team management
Good organisational skills ensure that you make the best use of your time to achieve a particular goal. It enables you to use your own effort and company resources to complete a task efficiently and effectively. In your CV, you can discuss how you organise your time and commitments while trying to balance academic work with extracurricular activities or part-time jobs.
Related: 10 Best Skills to Include on a CV
Teamwork is about being able to work effortlessly and efficiently within a team. This includes supporting each other, being able to compromise and set your own interests aside, and the ability to communicate, advise, negotiate and influence your team.
During an interview, you may complete group exercises at the assessment centre to test your ability to work in a team. To make a positive and lasting impression on the assessors, it's important to contribute constructively to conversations and activities while carefully listening to team members and encouraging them to do the same.
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