Growth strategies in retail banking

Bank privatization is almost complete in CEE. Croatia leads the region in retail lending. In terms of operational efficiency, local banks are already in good shape. The three key success factors in retail banking are strategy, distribution and marketing & sales effectiveness. Most Croatian banks offer universal services, but specialist and niche players have also proven successful.

Sometimes, these are interim stages on the way to becoming a universal retail bank. Alternative distribution channels offer faster payback combined with lower investment. Marketing expenditure is linked to sales success – variable remuneration for sales employees is a significant lever.

Currently, growth in retail lending is expected to slow down, since not all retail banks can offer universal services. Levers for profitable growth include cheaper distribution, product innovation and sales effectiveness.