Learning Objectives:

  • Distinguish between relationship banking and transactional banking.

  • Understand the strategic advantages of relationship banking.

  • Apply relationship management techniques to business growth.

5.1 Defining Transactional Banking

Transactional banking focuses on discrete, individual transactions rather than long-term relationships. Each transaction is handled independently, without deeper engagement. The bank’s focus is on processing transactions efficiently and accurately, rather than understanding the customer’s broader needs.

5.2 Defining Relationship Banking

Relationship banking involves building a long-term, multi-faceted relationship with the customer. The Keele University module emphasises that students must “critically assess the important role management plays in developing customer relationships and how this impacts overall bank strategy” . The BTRM curriculum includes “Relationship management” as a core topic .

5.3 Strategic Advantages of Relationship Banking

  • Customer Retention: Customers less likely to switch

  • Cross-Selling: Identifying and recommending additional products

  • Better Risk Assessment: Deep knowledge for accurate credit assessment

  • Higher Profitability: Loyal customers generate higher revenue

5.4 Relationship Management Techniques

The Alpha Partners Training course covers “People Skills to Deliver Excellent Customer Service” including: “Communicating with our customer, Listening styles and building rapport, Influencing skills, Persuasion techniques, Dealing with difficult customers, Understanding where anger comes from, Developing emotional intelligence” .

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