Strategic Issues in the Development of Ancillary Services by Retail Banks

Ancillary services as a generic product‐service group represent a key area for growth in the retail banking sector provided their introduction is low and concurrent with culture change within the sector. Ancillary services will absorb surplus staff for marketing purposes; the branch network will evolve towards a newer retailing‐based role, and the selling of integrated packages of services will retain customer contact and reinforce customer loyalty. These services can also boost fee earning and incremental profit, increasing market strength. Changing product design, training, infrastructure (branch design), and management control will aid the shift of the retailing structure towards ancillary services. However, these must not be seen to provide cosmetic solutions to banks' deeper problems, and the strategy should not provide a service far removed from existing operations.