Look around you. There are probably more banks standing all around than your favorite coffee shop. It wouldn’t be unsafe to guess that banking has become one of the most viable businesses of them all, would it?
But with so many competitions lie the problem of marketing. But then again, that is the beauty of it for you because you have a lot of choices where to put your money and investment.
Now, it is these banks problem to make the most irresistible business strategy for bank so you and a million yous will be more than willing to trust and leave your monies under a certain bank’s care.
What is the most effective business strategy for bank that you would find difficult to resist then? Here are some of the few probable services and benefits you would want your bank to-be to have and offer you:
Give More Loans
Of course, who are you to resist such a great opportunity? If a bank can trust to loan you a sizeable amount or back you up in the same way, would you prefer another that can’t trust you that way? But you don’t have to jump on the first bank that does that for you, especially if this bank is new and not as established as the ones offering you lesser benefits.
You should also do your own homework. There is a “scientific” explanation to what a bank can offer and what it cannot. You see, according to the capital adequacy rule, a bank can lend money depending on its own capital. The bigger it offers then the greater its capital should be. For this, you have to be very witty as there are a few banks, especially the less known and newer ones that can easily declare bankruptcy and all your money and collaterals are gone.
According to the same rule too, a bank should have an 8 percent risk-weighted assets capital ratio, 0.5 percent on mortgage loans, and 1.0 percent on ordinary consumer loans. You should also know that a Federal law mandates banks to maintain a 10 percent cash money reserve fund to cover bad loans and regulators force banks to have additional reserve fund money to cover less valuable property loans over the time.
Take More Deposits
Another business strategy for bank that may blow you away is the attractive extra services and benefits that a bank may offer. You see, one of these may be the quite high deposit rates that it offers.
This usually happens with new and community-based banks but not as often with huge established banks, so there is something kinky about it.
Why can’t big time banks offer you something as good as what your local bank can?
The obvious reason is that this is just a business strategy for bank. Large banks can just increase the number of their depositors geographically because they already have the means for doing so. Small and especially new ones don’t have the same capacity so their strategy is their service and all the benefits they can offer their small numbered members.
As you should know by now, core deposits are the most important funding sources for any banks. The more they have the greater the chance they can lend and profit huge. Since larger banks have as much as they need to have, they can fund huge loans and thus better profits.
But smaller banks may not have as much, ergo the need to gain more depositors. So look out for banks who are putting as much cut on their profits for your benefits, but make sure that they still have enough kept in the safe in untoward cases so your money will be kept intact for your future purposes.
Adding more sections like a Corporate Banking Section
Another very witty business strategy for bank is putting up an additional commercial banking section. Why wouldn’t they when the best bet for funding source is the depositor with huge deposits.
The problem is that there can only be at least one affluent in a mix of ten clientele, so what can they do to improve that demographics? Of course, there is nothing better than wowing corporations to place their monies on the bank. So huge banks definitely reserve their more enticing benefits and exclusive features to these corporations, which is why there is less to put out for the smaller, individual members.
This explains why your corporation or employer’s bank has a lot to offer you that those banks that you are meaning to invest on with your money. The next time you feel the need to thank them, make sure that you are not being used into one of its business strategy for bank. You see, you might be the person they should be thanking after all.