PRIVATE BANKING VS PERSONAL BANKING
In most banks, these terms are not clear and are defined differently. From a general point of view, the recipients or clients of private banking are people with a much better financial situation than in the case of personal banking. In private banking, customers are served in a much more personalised manner. The service here focuses mainly on advisory activities regarding the ways of investing the funds held by the client. Examples of criteria defining Private Banking and Personal Banking can be presented on the example of Bank. According to the criteria adopted in this bank, personal banking services are available to persons with average monthly income of at least usd 5 thousand or assets with a total minimum value of USD 50 thousand. They should also have a high social status and high prestige. It is not required that the assets at the customer’s disposal be in the form of deposits in their entirety. Assets in the form of securities may also be held. As far as private banking customers are concerned, they may include persons with average monthly income of at least USD 10 thousand or assets whose total value has been estimated at least USD 500 thousand.
All the limitations and requirements referred to above result from certain specific features of Private Banking and Personal Banking.
COMPARISON BETWEEN PRIVATE BANKING AND PERSONAL BANKING
A characteristic feature of both private banking and personal banking is the assignment of a personal guardian to each client, who is at their full disposal. In personal banking, this is mainly due to the desire to provide comfort to the customer, which is essential in this case. This presupposes that the bank undertakes to offer the customer a service which is efficient
and one-stop-shop, full discretion and simpler procedures. The bank’s offer addressed to customers includes a full range of services provided by the bank, which additionally provides for the possibility of individual negotiations on specific terms and conditions. The main task of the guardian is to make it easier for the client to cooperate with the bank. In private banking, on the other hand, the main role of a guardian is to act as a financial advisor. It is designed to help the client increase his assets, taking into account the client’s needs and expectations and the level of risk to which the client is in a position to give his consent.
Summarizing all previous considerations on Private Banking, it can be concluded that it is a specific form of providing specific services by banks, which
guaranteed as a result:
PRESTIGE – the main objective of Private Banking is to satisfy specific personal needs and expectations of customers who are distinguished by exceptionally high financial potential and social status (they are above average rich and stand high in the social hierarchy) by offering them the opportunity to belong to an exclusive group of selected customers of a given bank.
QUALITY – the final result of the bank’s work for a customer in Private Banking is the creation of an offer containing the highest quality banking services and products and ensuring the customer high comfort of service. These effects are the result of the exceptional care taken to ensure the quality of services offered by the Bank to its customers at all stages of their implementation. The client has a permanent guardian, who is an appropriately qualified employee of the bank. His work, which is very general, is based on providing constant care to the client. This care consists of proper management of the customer’s account, assistance
conducting all banking operations and transactions and seeking sources of capital or investment tailored to the client’s needs.
TIME – banks specializing in Private Banking try to introduce to their offer such facilities and solutions that will save time of their customers. The unquestionable advantages of private banking include the possibility of conducting transactions via the telephone or the Internet, which eliminates the need for time-consuming visits.
at a given bank.
INDYWIDUALISM – each client is assigned a personal guardian, whose task is to get to know the individual needs and expectations of the client, in order to be able to prepare for the client proposals of non-standard, individualised transactions or to introduce specific changes and modifications to the existing services in the bank’s offer, so that it is consistent with the personal needs of the client and fully meet his expectations.