Retail Banking – Introduction

Course Content:

Session 1: Review

Objective: Setting out the basics

• What is a bank
• The role of banks
• Type of banks
• Client base
• Services
• Personnel
• Economies of scale
• Management structure
• Regulation & reporting
• Shareholders expectations

Session 2: Deposit Taking & Savings Products

Objective: To understand deposit and savings products

• What is a deposit?
• Why do banks need deposits?
• Current, Short, Medium & Long Term Deposits
• Pricing & advertising
• Retail Deposits & Business Deposits
• Savings Products
• Money laundering constraints & know your customer
• Deposit protection

Exercise: What is the main difference between current, deposit and fixed term accounts? Which is the most attractive to the bank and why?

Session 3: Account Opening Procedures

Objective: To understand what basic steps are required when opening accounts

• Know your customer requirements & money laundering
• References & Introductions
• Documentation
• Current/checking accounts
• Deposit/savings Accounts
• Personal Accounts
• Business accounts
• Corporate accounts
• Banks duty of secrecy

Exercise: You are asked to open a checking account for a new personal client. What references will you need? What paperwork is required? Do you have to meet the client in person? Why?

Session 4: Lending Products

Objective: To understand the different types of lending products

• Overdrafts & loans
• Medium & Longer Term Finance
• Asset finance (including Vehicles, Plant, Machinery etc)
• Leasing
• Mortgages
• Personal Lending
• Business Lending
• Corporate Lending

Exercise: What is the most common form of lending at your bank? Why is this?

Session 5: Other “Non-Funds” Based Retail Banking Services

Objective: To understand the different types of services available from a retail bank in addition to deposits and loans

• Safe Custody
• Forex
• Travel Facilities
• Dealing Services
• Executor & Trustee services
• Investment Management
• Dealing/Broking Services
• Insurance
• Private Banking
• Wealth Management
• Trade Finance
• Money Transmission Services

Exercise: All Retail Banks seek to boost earnings by selling additional services. What is being targeted by your branch/department? How successful have you been? What would you change, if anything?

Session 6: The Basic Principles of Lending

Objective: To consider basic lending skills

• People skills
• “CCCPARTS”
• Secured lending
• Loan to value calculations
• Unsecured lending
• Loan authorisations
• Funds release procedures
• Control of lending
• Regulatory considerations

Exercise: What is the most important consideration when granting or assessing a loan? What is the least?

Session 7: Introduction to Credit Analysis

Objective: A first look at bank credit analysis.

• What to look for
• Budgets & Forecasts
• Track Record
• Sector & Segment Considerations
• Security
• The Credit Appraisal Process
• Applying to the Credit Committee

Exercise: You have been approached by a good and valued client who is looking to take on a major commitment. You know they will need some bank debt. What do you want them to produce prior to a meeting to discuss this?

Session 8: The Basics of Risk Management

Objective: To consider the usual risks facing a retail bank.

• What is risk
• Types of banking risk
• Monitoring & control
• Branch/Unit security
• Reports, limits, excesses
• Risk control

Exercise: What are the biggest risks facing your department? How are these monitored? How are they managed?

Session 9: Introduction to Debt Collection and Recovery Procedures

Objective: Understand why loans go wrong and what to do about it.

• Why loans go wrong
• The five usual reasons.
• Other reasons
• Cant pay or wont pay
• Early warning signs and how to spot them
• When to act

Exercise: To suit group requirements.

Session 10: Sources of Funding – The Basics

Objective: An understanding of funding sources available to a retail bank.

• Current, Deposit and term accounts
• Money markets
• Savings & investment products
• Inter bank markets
• Commercial paper
• Liquidity crisis issues

Exercise: Liquidity is the key to managing any retail bank successfully. What are the key risks in this area?

Session 11: Distribution Channels – The Basics

Objective: How to operate a retail banking operation and the role of technology

• Distribution Channels
• Branch network
• Other organisations
• Internet

Exercise: To suit group requirements

Section: 12 – Technology – The Basics

• Importance
• Cost
• Client requirements
• Management requirements
• Regulatory Requirements
• Civil Service model

Exercise: Consider what minimum distribution channels are needed in your organisation.

Exercise: Consider what minimum technology is needed in your organisation.

Session 13: A Brief Look at the Banking Crisis

• What is it
• What caused it
• When will it subside
• How will it affect your organisation
• Consequences for retail bankers

Session 14: The Future of Retail Banking

Objective: To consider the possible ways forward for the sector

• Traditional Definitions
• Generalists versus specialists
• “Big Bang” theory and retail deposits
• Delivery mechanisms
• Costs versus service
• Retail outlets options
• Telephony
• Internet banking
• All inclusive banking
• Microfinance

Exercise: If you could design your own retail bank, what would it be like? Could you make this model commercially viable?

Session 15: Summary & Group Forum