Functional Model In Banking

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The banking industry is currently going through the changes in terms of internal work prioritisation and business transformation towards sustainable development and better customer satisfaction. Over the last decade the number of corporate scandals in banking sector significantly increased. Huge penalties and fines paid by the large banking corporations have become an acceptable norm of conducting the business. After the eruption of financial crisis in 2008 the regulatory scrutiny over banking activities seriously intensified and public pressure remarkably increased. Due to these factors the restoration of customers trust occurred and, hence, the difference between customer attrition rate before and after financial crisis became higher. The…show more content…
According to the report prepared by Ernst&Young, the clients confidence towards banking industry decreased by 44% in a post crisis period worldwide (Ernst & Young , 2011). However apart from the direct impact of the happened events in the banking sector there are some indirect ones that nevertheless has strong influence on the banking model. To be more precise it is about the on-going changes in traditional understanding of the bank and its functional model. The environment around the financial services has become tense and highly competitive. The number of non-bank institutions that are providing financial services to the current or potential clients of the bank has been constantly increasing. It can be said that banking industry is at critical point due to the disintermediation. Nowadays customer can be targeted by non-bank institution like Groupon, ByWithMe, DeinDeal, etc. They are more aware about the customers’ preferences and interests and, hence, they are always ready to suggest an interesting offer in an appropriate field, for example grant a 50% discount in spa centre or a special offer for romantic dinner. At the moment of purchase, customer choses between the payment through the mobile app, PayPal or Google/Yandex wallet. Thus, in this case there is no need for bank, instead a customer has many other options to execute the…show more content…
Consumers turned in to sustainability not only when they make buying decisions in clothing shops, grocery and furniture. Clients pay attention to the presence of solid CSR strategy in a bank. Bank clients require an increased level of transparency and information disclosure. They wisely come to the decision about sustainable investments. More often clients want banks to take into account social and environmental factors in addition to financial ones during the asset management portfolio. Moreover clients have started to pay better attention to the types of projects that bank finances, how it treats its employees and whether it contributes to the development of the

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