Master of Economics and Business Bissenova R.A.

Kyzylorda State University Korkyt Ata, Kazakhstan

Ways to increase the efficiency of retail business management in commercial bank

Development of retail banking is one of the modern trends of development of banking in Kazakhstan. The tendency to turn to the retail banking in Kazakhstan is related to the fact that at changing of market situation, it is very difficult for banks to compete on the corporate segment of bank market. Till this time, Kazakhstan banks were not focused on development of retail business, basically hoping that the operations with corporate clients gave them the acceptable level of profitability.

Main goals and tasks of this article are:

1. to reveal the reasons of insufficient development of the sphere of providing services to private clients by Kazakhstan financial and credit institutions;

2. to propose ways how to improve the efficiency of development and philosophy how to advance retail bank business. [1]

Different literature: scientific, analytical literature were used within preparation of this article.

At present Kazakhstani banks considerably are behind of western credit-finance institutions in the sphere of rendering services to private clients, that caused by some objective reasons, such are:

First, non-development of the market. At present retail banking is one of the less developed segments in providing services to clients, hence has huge potential to development, which makes possible banks to compete and achieve leading positions due to offering marketable products and services. The structure of credit operations and the range of offered retail products and services also will allow to say that retail banking market is at its initial stage of development.

Second, the greenness of the Kazakhstan banking system.

Third, considerable polarization of revenues and low level of income of the most part of community. Meanwhile, community income level has an impact on the development dynamic of retail banking market and serves as indicator for its participants at development of special programs. Countries with extensive system of retail banking services, revenue concentration of 10% of the richest people comprises 25%. Such concentration of incomes besides narrowing down the target segment, but it complicates introduction of new participant’s retail banking activity to the market.

Forth, high initial expenses for creating facilities to distribute bank products and services, both traditional and direct bank servicing facilities should be taken into account.

Fifth, insufficient development of bank infrastructure. The concentration of banking capital is mainly accumulated in the cities.

Sixth, lack of experience of Kazakhstan banks to work with private clients.

At this, all facts mentioned above integrated with the objectives to improve the competitive position, maximally expand the sphere of providing bank products and services, develop bank products and services distribution facilities and enhance profit, most of domestic banks shall widely develop retail banking activity.

From our point of opinion, the following ways to improve the efficiency of development and improvement of retail banking can be highlighted:

· to provide more wider access to banking services through information technology;

· Personalization of products and services at development of financial products and service options;

· Improve the efficiency and quality of personnel operation;

· Promotion of bank brand;

· Strong communication and marketing;

· Orientation to meeting of clients requirements. [2]

Due to the orientation of commercial bank to ensuring extensible access of information technologies to bank servicing, scientifically justified model of multichannel retail banking and , factors of is successful development (Figure 1) can be offered and here are concrete recommendations on organizing of each direct bank servicing channel. [3]

Figure 1 - Diagram of multichannel retail banking

We consider that multichannel banking means not only application of new information and communication marketing technologies and methods, but it includes offering of products and services by various ways and means. In addition, bank shall render optimal service to clients, providing banking operations will be executed where, when and how the client desires.

As efficient instrument of improving the efficiency of retail business, the model of cross-sale process in commercial banks is suggested, where the detailed description of main stages is given and basic factors of successful cross-sale strategy are emphasized. Systematic cross-sale process shall include the following stages:

1) clients analyzing (identification of attractive target segments, review earlier used products, clients needs determination, that is very important for cross-sales);

2) Bank analyzing (compliance of clients needs with available products and services; revealing and elimination gaps in banking products);

3) planning of sell actions (compiling of offers packages; planning of actions for preparation of products to selling);

4) delivering of offers to client;

5) control (analyzing of success of action).[4]

At retail marker of financial services it is required to turn from service culture to retail trades culture aimed at selling. Work organization and technologies shall ensure changing over of bank offices into retail sell points, and bank personnel will act as sales manager, welfare of whom will depend on the sales result.[5] Bank departments shall be act as the “stores”, selling finance services or “finance stores” that requires re-conceiving of the role of personnel, spatial organization of bank office and its technological platform. Guiding on specified tasks, the model of organizational structure aimed at retail products and services sell was developed (figure 2).

Figure 2 – Diagram of retail banking organizational structure

Organizational structure may be added by the relevant departments depend on the scope of performed commercial bank operations and the range of bank activity [6]. But, by our opinion, the priority in organization structure should be allocated to the departments: marketing, sales and control departments, the author gave the detailed description of the aims of the last department and recommendations on arranging its activity.

BIBLIOGRAPHY

1. Abramishvili G.G. and others – “Marketing” Operation. Strategy and monopoly competition tactics. – M. International relations, 1976

2. Gerasimenko V.V.  Marketing fundamentals.  M: TMC, 1999

3. Jozlin R.V.  Bank marketing.  M.: Finance and Statistics,  1998

4. Konakova L.V., Functional duties of marketing department specialists of commercial bank. / L.V. Konakova – M: Editors house at MGTU, 2002.- p. 334

5. Maslenchenkov Yu. S. - Bank processing and organizing operations: theory and practice, M. DeKA, 1998

6. Markova V.D. – Marketing of services / V.D. Markova - M: Finance and statistics, 1999. – p. 223