Introduction
There are many services offered to the personal banking customer by banks i.e. services and products, which are meant to make the money-management and access easier. Meanwhile these products earn revenue for these banks in return.
The very first and popular products are the credit card and automated teller machines. Various banks have access to a database, which may have been gathered at a shopping mall you visited or a restaurant you ate at or may have availed to a service at a sister concern. The customer receives cold-calls from an outsourcing service provider stating that you just have to submit your income tax papers, bank statements and identification documents and you will be eligible for a credit card. The debit card comes with the account where the option is available as soon as you sign into a bank via a saving/checking or personal/corporate account. Many banks like HSBC and Citibank have 10% money back scheme on all the shopping one does via their credit card.
Explanation
For further convenience, ability and techno-savvy the customers are provided with tele-banking and internet banking codes to manage their accounts from their desks. Customers can also pay utility bills, buy services and goods or pay their income tax by staying at home.
The customers can finance their insurance plans, old-age pension plans, ask for loans etc. for their personal use like getting the daughter married or buying a car or starting a business. Some services or plans offer schemes to save customers money from getting devalued for example term plans and recurring plans. These plans allow the customer to invest the money in the bank at a higher rate such as by opening a saving/current account and allow its value to compound.
Retaining customers and attracting competitors customer is the challenge for business and its marketing manager (Philip and Kevin 2008). Banks offer different plans to retain their customers and there plans include housing loans, education loans, loans for pensioners, loans against a mortgage of property, loans against shares and debentures, loan against rented property and loans for medical expenses such as a heart surgery, etc.
On of my friends visited HSBC bank and applied for loan against gold. One gets the complete value of the gold if it is 24 carat coin, biscuit and bullion gold but gets market price for 22 or 18 carat gold, i.e. the 75 and 60 % value of gold on the ornaments (HSBC, 2009).
Banks not only consider benefits for adult customers but also launch schemes beneficial for their customer’s young ones by offering scholarship loans to aspiring students. There is a procedure for getting scholarship loans. Application of the students is reviewed by the management of the bank. They study the applications of the students applying for various courses within country and abroad, project their earning potential and value of the property or jewelry put on a mortgage and grant the time duration of 20 to 30 years to pay their loan back at nominal rates of interest. One of my students had applied to study at the London School of Economics, the Citibank gave him a loan against the amount worth 0.5 million dollars. He has completed his course at LSE and is employed in London and earns 1500£ and is slowly and steadily paying back his loan.
Conclusion
Considering the current recession, banks are also looking at refinancing. One of my friends has a mortgage to pay but due to downsizing by companies she lost her job. She consulted her banker and he informed her about the Hope for Homeowner’s scheme passed by the US senate recently (Federal Housing Association 2009). The bank checked who had financed their Loan – Fannie Mae – and checked out the equity of the home and how much they had paid. Banks ask for 20% of equity to be paid and then they become 50% co-owners of their customer’s house. They reduce the interest rate and the payment to 31% of their monthly income. The Lenders receive incentives to help the citizens (Making Home Affordable 2009).
Bibliography
- Philip, K., and Kevin, K.(2008) Marketing Management, London: Prentice Hall.
- Federal Housing Association (2009) Announcing changes to the HOPE for homeowners Programs.
- HSBC (2009) Personal financial services bank tariffs 2009.
- Making Home Affordable (2009) Home affordable refinance.