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Relationship Banking

Where the customary emphasis is on the acquisition of new clients, client retention and improvement receives equal attention in relationship banking. Thus, relationship banking may be said to be attracting clients, and maintaining and enhancing client relationships.

There are obvious advantages to the banking institution to be derived from a successful implementation of the relationship banking concept. Stability of the client base is enhanced. Profitability is improved through client base stability, because the extension of additional services to existing clients is a more cost effective process than the acquisition of new customers. Further, profitability is improved by concentrating operations in the most profitable marketing segments.

Relationship banking is an attempt to avoid a misidentification of the line of business in banking. It may not be the right answer, but it is being considered for the right reasons.

Based upon the findings of this study, the answer to the research question investigated is a resounding yes--in the short-run. In the long-run, however, the answer is somewhat more difficult to formulate. While relationship pricing may be effective as a means of promoting relationship banking, and while it may prove to be legal in the short-run, long-run difficulties may result. In the long-run, it is possible that relationship


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Relationship Banking. (1969, December 31). In Retrieved 01:53, October 23, 2014, from
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