Banking · Retail Banking Structures and Models
A large public sector bank is transitioning from a traditional branch-based model to a more robust Retail Banking structure to enhance its operational efficiency and market share. During this transition, the bank decides to implement a Horizontal Organized Model for its retail operations. In the context of bank operations, which of the following best describes the operational characteristics and challenges associated with the implementation of a Horizontal Organized Model in a large-scale banking environment?
- 1The model integrates retail banking assets and liabilities into the existing corporate structure to ensure that all customer segments are handled by the same relationship manager to maintain consistency.
- 2The model provides a modular structure where different product groups like housing loans, personal loans, and credit cards are managed as separate silos with independent profit and loss responsibilities across the bank.✓
- 3The model emphasizes a centralized processing cell for all retail products where the branch only acts as a sourcing point while the entire underwriting and documentation are handled by specialized back-end units.
- 4The model involves a side-by-side functional alignment where retail operations are distinct from corporate operations but share the same technology platform and support functions to minimize cost.
Correct answer
The model provides a modular structure where different product groups like housing loans, personal loans, and credit cards are managed as separate silos with independent profit and loss responsibilities across the bank.
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