Corporate vs.

Retail Banking

Prasad Kaipa
 Corporate vs. Retail Banking
Small number of Mobilitation of deposits
customers for individuals
Narrow client base Lending to small business
Large value transactions and retail local markets
Large number of Large volume and low
transactions value transactions
Inter-bank transactions Liabilities are mostly
Larger sum of money related to various types of
deposits accounts
Inter-bank markets
Loan portfolio is
Funds for business dominated by the
undertakings consumer loans
Low cost of processing High processing cost
 High level of customer Moderate level of
relationship customer relationships
Concept of a personal Range of options with
banker high technology
component
Close attention and quick Value differentiation
service to customers comes from customer
Each customer has unique service
requirements Dedicated, highly
Custom solutions and total professional employees at
service approach junior and middle
management level value
differentiation
Product needs to be well
 Transformation in retail banking
In the past, customers were happy with moderate-
yield, 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
 Roosevelts 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 cant learn, he has reached the stage where other people cant 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 Train

Inspire

Develop
 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. Dont 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 Align
Control Motivate

Values
Direction What Leaders Do based on
Jim Fisher, Dean, Rotman
Involvement 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 Consultation Joint Decision Delegation

Decision

No influence High influence

by others 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)
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, self-
Learning confidence
Proactively seizing EQ
opportunities Integrity
Creativity Ambition
Engaging Others by Creating Competence
Shared Meaning Moral compass
Encourage dissent From interviews of extra-
Empathy ordinary achievers under
Obsessive communication 35 (geeks) and over 70
(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
Worldviewunderlying beliefs by which a
leader views and brings forth into the world.
Authenticity genuineness based on a
principle-oriented approach.
Masterypursuit of mastery of self and
others.
Serviceaction based on an other-focused
approach.
 Authenticity
1. Communicationdefined as the leaders ability to
effectively exchange information, objectives, and vision
with followers.
2. Connectiondefined as a bond between leader and
followers based on the leaders ability to affiliate at the
followers level.
3. Consistencydefined as a leaders ability to retain
constancy in words, deeds, and actions with minimal
variation.
4. Convictiondefined as the leaders firmly held belief in the
vision.
 Authenticity
5. Couragedefined as the leaders ability to stay true to the
vision and course of action regardless of sacrifice,
difficulty, or uncertainty.
6. Equalitydefined as equal opportunity and treatment
among followers in relation to the vision.
7. Exemplardefined as the leaders ability to be an ideal
example of those principles fundamental to his worldview.
8. Valuesdefined as the core qualities demonstrated by the
leader.
9. Visiondefined as the leaders future ideal for self and
followers.
 Soulful Leadership Model -
Kathleen Fleming Dissertation 2004

Service
(other-focused)

Worldview
(transcendent-focused)

Mastery Authenticity
(inner-directed / (inner-directed /
other-focused) other-focused)
 Soulful Leadership Model
Kathleen Fleming Dissertation 2004
Worldview
(transcendent- Belief in transcendent
focused) Spiritual Practice
Change
Interconnectedness

Service
Mastery
Authenticity

Consistency Self-Mastery
Humility
Conviction Servant
Courage
Leader Values
(inner- Vision Teacher
directed)

Communication
Connection
Equality
Follower Exemplar ti on
(other-
a liza
focused)
Actu
tu al
Mu