Retail banking has always been an important part of the Indian banking sector. While it is not amongst the highest contributors in this sector, it has still showed a phenomenal growth trend. A significant part of the credit growth comes from retail banking only. Even though the growth of retail banking has not remained on a fast track, it has swiftly transformed a seller’s market into a buyer’s market.
The Indian retail-banking sector offers a variety of products to multiple consumer groups through a range of distribution channels. However, the young population of India is contributing the most to the growth of retail banking. There are several dynamic factors that have been driving the retail growth in the country. These factors include the increasing disposable income, growing level of literacy, higher use of technology, fiscal incentives, growing consumerism, market competition, and changing mindsets toward improved lifestyles.
Factors like above have also been changing the sector’s response to provide faster and improved services that are focused on consumer needs, as well as their preferences. The banking sector has been formulating several strategies that are oriented toward customers. It has also been building relationships well with them. All these efforts are indicating toward a better future of retail banking growth in the country. The area of retail banking may shine better than ever.
There can be dramatic changes seen in this sector during the coming years. However, it is important for banks to lead on the performance and quality fronts and display efficiency in their processes. While overcoming challenges like the sustenance of customer loyalty, offering a wide range of financial advisory services, expanding on a cost-effective basis and bringing masses into the mainstream sector, banks can definitely show a much broader expansion in the retail banking area during the coming few years.
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