Relationship Banking

AAA

DEFINITION of 'Relationship Banking'

A strategy used by banks to enhance their profitability. They accomplish this by cross-selling financial products and services to strengthen their relationships with customers and increase customer loyalty. Relationship banking involves offering customers a broad array of financial products and services that go beyond simple checking and savings accounts.

In addition to these two basic products, relationship-banking products may include certificates of deposit, safe deposit boxes, insurance, investments, credit cards, loans and business services (e.g., credit card processing). They may also include specialized financial products designed for specific demographics, such as students, seniors or the wealthy.

INVESTOPEDIA EXPLAINS 'Relationship Banking'

Customers may be able to take advantage of banks' desire to develop relationship banking to obtain more favorable terms or treatment with regard to some banking products as well as to obtain a higher level of customer service. However, federal anti-tying laws established by the Bank Holding Company Act Amendments of 1970 prevent banks from making the provision of one product or service contingent on another (with some exceptions).

RELATED TERMS
  1. Relationship Management

    A strategy employed by an organization in which a continuous ...
  2. Relationship Manager

    A professional who works to improve a firm's relationships with ...
  3. Checking Account

    A transactional deposit account held at a financial institution ...
  4. Insurance

    A contract (policy) in which an individual or entity receives ...
  5. Credit

    1. A contractual agreement in which a borrower receives something ...
  6. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
Related Articles
  1. Credit & Loans

    The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  2. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  3. Savings

    All About Banking

    This tutorial will tell you everything you need to know about how checking and savings accounts work.
  4. Options & Futures

    How To Break Up With Your Bank

    Whether you're moving or have just found a better no-fee plan, find out how to switch banks with ease.
  5. Credit & Loans

    Best Credit Cards For 2015

    The best credit card for you depends on your financial goals. Our choices for the best cards in 4 different categories.
  6. Fundamental Analysis

    What's a Tangible Asset?

    Tangible assets are property owned by a business that can be touched -- they physically exist. Examples include furniture and fixtures, computer hardware, delivery equipment, leasehold improvements ...
  7. Fundamental Analysis

    Cash Flow From Operating Activities

    Cash flow from operating activities is a section of the Statement of Cash Flows that is included in a company’s financial statements after the balance sheet and income statements.
  8. Credit & Loans

    Credit Card Review: The Target REDCard

    Target's credit cards provide direct discounts, charge no fees, and give a surprising education bonus to local schools. But there's a high APR.
  9. Budgeting

    Are You Spending Too Much?

    Post-holiday credit card bills are just one signal that it's time to cut back on spending. Here are others.
  10. Fundamental Analysis

    What are the components of shareholders' equity?

    Understanding company valuation figures, such as shareholders' equity, can be a powerful tool in assessing the financial strength of a business.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center