Trends, Deresgulation / re-regulation, Retail Banking, Opportunities and Challenges, The 20 largest banks in the world, Top 15 Core Banking System Vendors, Top Banking Software / Vendors, Domestic Strategic Option, Cross Border Economies and Synergies.

2.  Despite increasing competition and pressing regulatory challenge
s, The Retail Banking industry has the potential for real
growth.
 This is a pivotal time for retail banks.
 The ever changing regulatory Requirements such as BASEL,
MiFID and Antimoney Laundering are Swallowing up huge
resources, while ageing population in many markets is forcing a
rethink strategies.
Technology is helping new low-cost operators to squeeze
margins, and risk management, particularly for credit and operat
ional risk

3.  Which are the key trends in the global retail banking
industry?
 Opportunities and Challenges of Retail Banking in India
 Who are the top 10 retail banks in the market and who
ranks 11 to 20?
 Who are the top 5 core banking system vendors
 What are the strategies that are driving the revenue and
market share of the leading retail banks?
 What is the future outlook for the retail banking industry?

4. 1)Deregulation/Re-regulation
 CAMELS System:
 Capital
 Asset Quality
 Management Quality
 Earning Quality
 Liquidity
 Sensitivity to Market Risk
 Efforts at deregulation and re-regulation generally address:
◦ Pricing issues: Removing price controls on the maximum interest rates paid
to depositories and the rate charged to borrowers (usury ceilings).
◦ Allowable geographic market penetration
◦ New Products and services
 Shortcomings of Current Banking Regulations:
◦ Does not prevent bank failures
◦ Cannot eliminate economic risk
◦ Does not guarantee that bank management will make good decisions

5. 2) Rising Competition from other Financial Services Companies:
• Competition for deposits
• Competition for loans
• Competition for payment services
• Competition for other financial services
Competition for loans comes in many forms:
• Commercial paper
• Captive automobile finance companies
• Other finance companies
• Junk bond
Competition for payment services is coming from emerging electronic
payment systems, such as:
• Smart and stored-value cards
• Automatic bill payment
• Bill presentment processing
• Cash money can be acquired at any teller machine
• Open a checking account, apply for a loan and receive funds
electronically.

6. 3) Off-Balance-Sheet Activities
◦ Loan Commitments
◦ Loan guarantees
◦ Standby Letters of Credit
◦ Interest Rate Swaps
◦ Futures, Forwards & Options
◦ Leases

7. 4)Information Technology and Banking
 New technology had made offering new products available:
◦ Securitization would not be possible without the servicing
software that controls and monitors cash flows.
◦ Investors trade pools of credit card loans because they can
assess default risk without knowing the creditworthiness of
each borrower.
◦ Swaps, swaptions, collars and caps are feasible and easier to
use because computer pricing models narrow the bounds of
mispricing and other errors.
 Internet banking had reduced costs substantially;
 New technology had relaxed the geographical market and
product constraints, which led to a greater market
consolidation.

8. 5) Globalization
 The gradual evolution of markets and institutions so that
geographic boundaries do not restrict financial transactions.
 Firms must recognize that businesses in other countries as
well as their own are competitors, and that international
events affect domestic .operations

9.  Retail banking has immense opportunities in a growing economy like India.
 How does the world view us? The BRIC Report talking India as an economic
superpower.
 A. T. Kearney, a global management consulting firm, recently identified India as
the 'second most attractive retail destination' of 30 emergent markets.
 The rise of the Indian middle class is an important contributory factor in this
regard.
 The percentage of middle to high income Indian households is expected to
continue rising.
 The younger population not only wields increasing purchasing power, but as far
as acquiring personal debt is concerned, they are perhaps more comfortable
than previous generations. Improving consumer purchasing power, coupled with
more liberal attitudes toward personal debt, is contributing to India's retail
banking segment.
 The combination of the above factors promises substantial growth in the
retail sector, which at present is in the nascent stage.
 Due to bundling of services and delivery channels, the areas of potential
conflicts of interest tend to increase in universal banks and financial
conglomerates.
Some of the key policy issues relevant to the retail banking sector are: financial
inclusion, responsible lending, access to finance, long-term savings, financial
capability, consumer protection, regulation and financial crime prevention.

10. The 20 largest banks in the world
Bank Country Total Assets ($M)
1. Mizuho Financial Group Japan $1,285,471
2. Citigroup United States 1,264,032
3. UBS Group Switzerland 1,120,543
4. Credit Agricole Mutual France 1,105,378
5. HSBC Holdings United Kingdom 1,034,216
6. Deutsche Bank Germany 1,014,845
7. BNP paribus France 988,982
8. Mitibush Tokyo Financial Group Japan 974.950
9. Sumitomo Mitsui Financial Group Japan 950,448
10. Royal Bank of Scotland United Kingdom 806,207

11. The 20 largest banks in the world
Bank Country Total Assets ($M)
11. Barclays Bank United Kingdom $791,292
12. Credit Suisse Group Switzerland 777,849
13. J.P. Morgan Chase United States 770,912
14. UFJ Holdings Japan 753,631
15. Bank of America United Statements 736,445
16. ING Bank Netherlands 684,004
17. Societe Generake France 681,218
18. ABN-AMRO Bank Netherlands 667,636
19. HSBC United Kingdom 650,721
20.Industrial and Commercial Bank of
China
China 637,829

19.  Banking strategies to improve performance and to grow in
domestic markets can be divided in three main categories:
 A. Cost reduction
 B. Revenue or organic growth
 C. Domestic mergers, acquisitions and alliances

23.  Flexibility in branch organization is key to success in retail banking.
While regional differences must be taken into account, banks respond
quickly to clients needs are garnering the critical edge.
 Preparing for the post-growth period
 Converging markets
 There is a need of constant innovation in retail banking.
 In bracing for tomorrow, a paradigm shift in bank financing through
innovative products and mechanisms involving constant upgradation
and revalidation of the banks’ internal systems and processes is called
for.
 Banks now need to use retail as a growth trigger.

24.  This requires product development and differentiation, innovation and
business process reengineering, micro-planning, marketing, prudent
pricing, customisation, technological upgradation, home / electronic /
mobile banking, cost reduction and cross-selling
 While retail banking offers phenomenal opportunities for growth, the
challenges are equally daunting.
 How far the retail banking is able to lead growth of the banking industry
in future would depend upon the capacity building of the banks to meet
the challenges and make use of the opportunities profitably.
 However, the kind of technology used and the efficiency of operations
would provide the much needed competitive edge for success in retail
banking business.
Furthermore, in all these customers’ interest is of paramount importance.

25.  UK Faster Payments – from May 2008 it will be possible
to move sums of money in almost real-time, so there will
no longer be a need to withdraw cash from one branch
and run to another bank’s branch to deposit the same in
an urgent situation.
 End of Cheques - Major retailers that no longer accept
cheques include; Argos, Boots, Next, Sainsbury's, WH
Smith, Currys, and those that could soon follow suit,
include Asda, Morrisons, PC World and Tesco.

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