Retail banking is an industry that revolves around relationships as much as it does money. Without relationships, it would be extremely difficult to operate as a lending or investing institution, simply because of the sheer amount of trust that is required to engage in the variety of complex transactions that take place throughout the retail financial sector on a daily basis.
This industry requires a trusting business relationship to function, many banking customers find that the ease with which they can work with their bank, in terms of flexibility and availability, increases as they spend more and more time with that particular institution. However, the relationship requirement is also a source of frustration for many new customers, as they find themselves dealing with a seemingly unforgiving counter-party at first. That being said, the relationship building process with a bank is not an entirely unforgiving process, and can actually be managed by a customer across a series of stages.
The first stage of building a relationship with a bank is considered to be one of establishing trust on a depositing basis. During the first 2 years of a banking relationship, banks are looking to be sure that a customer is able to manage their accounts independently, and in a way that does not put the bank itself at risk via bounced checks and overdrafts. It is also during this period that a customer can demonstrate their willingness to build a relationship with the bank through the variety of transactions that they complete through the institution.
Specifically, the bank wants to see that the customer is using their accounts with some amount of commitment, which is usually demonstrated through the presence of some sort of direct deposit coming into the account itself. When a bank sees funds coming into the account, it knows that a customer is using the account seriously, and is in a position to build a relationship with the bank. This will usually begin with the bank taking steps to ensure that the customer has access to their funds through the provision of a release amount on checks and deposits, or even an overdraft on the account to cover short-term cash flow timings.
The second relationship stage between a bank and its customer is the stage in which more sophisticated products come to the table. It is during this period that banks respond very favorably to customers that are taking advantage of savings or investment platforms. While these accounts might not represent a very large amount of business in terms of revenues, they do show that the customer is looking to keep their funds with the bank for a longer period of time, in the interests of earning returns.
By even simply putting funds into a term deposit or interest bearing certificate, the customer is tying themselves down to that particular bank for a set period of time. In response to these actions, banks will usually take measures to ensure that their customers still have access to liquid funds in light of their investment through the provision of small short term debts and operating lines of credit. This means that banks will often take proactive measures to provide credit cards to customers that have investments or savings with their deposits, regardless of the dollar amount of funds that are on deposit.
The third relationship stage between a bank and its customer revolves around the issuance of debt. At this point in time, the customer is using the bank as their primary financial institution, and the bank is reciprocating the commitment through prioritized treatment. This can include anything from preferential rates on investment and loan products, the offering of exclusive products or promotions, or providing the customer with access to special advisory services to ensure that they are able to maintain their financial position and meet their future goals.
By meeting these financial milestones with a bank you can avoid applying for payday loans online and receive much better interest rates. While Frozen Pea Fund does profit from matching you will payday lenders we would rather see you secure a bank loan with lower interested rates to improve your financial position.