The banking industry is essentially a service industry that provides banking and related financial services to its clients. Competition is tough, and comes not just from other banks but other financial companies, like private lenders. Therefore, it is important that banks develop a close relationship with customers and come out with innovative measures to satisfy their needs.
Traditionally, services and products are worked out at the Head Office level and handed down to various branches for implementation. This is also known as the “Top to Bottom” approach in bank marketing. The “Collective” approach, on the other hand, is a bottom to top approach where products and services are formulated at the grassroots level to suit the needs of different groups of customers. Banks also use the “Selective” approach that concentrates on certain select customers.