Retail banking remains one of the most critical drivers of financial inclusion and economic growth in developing economies. Dr Makgorong Reginah Masete’s research investigated client engagement in retail banking with a focus on how socio-economic contexts influence customer relationships, loyalty, and trust in financial institutions.
The Importance of Client Engagement
The study underscored that client engagement is not only a measure of customer satisfaction but also a strategic tool for sustainable growth in banking. In highly competitive financial markets, engaged clients are more likely to be loyal, use multiple services, and advocate for their bank.
Socio-Economic Influences
The research highlights how income levels, employment status, education, and financial literacy shape client-bank interactions. In developing economies, many clients face barriers such as limited access to technology, mistrust of institutions, and economic vulnerability, which hinder deeper engagement.
Retail Banking Challenges
Retail banks often struggle to balance profitability with inclusive banking. The study shows that aggressive sales tactics and inadequate communication erode trust, especially among vulnerable communities. Furthermore, digitalisation, while offering opportunities for convenience, also risks excluding clients who lack digital skills or access.
Opportunities for Banks
Dr Masete argued that banks must move beyond transactional relationships and foster meaningful engagement through:
- Client-Centred Strategies: Tailoring products to specific socio-economic realities.
- Financial Literacy Programmes: Equipping clients with knowledge to make informed decisions.
- Trust-Building Practices: Enhancing transparency and reducing hidden costs.
- Inclusive Digital Banking: Ensuring digital solutions do not alienate low-income or digitally excluded groups.
Conclusion
The thesis concluded that retail banking engagement must be redefined in the context of developing economies. True engagement is not achieved through product sales but through building trust, addressing socio-economic barriers, and empowering clients. In this way, retail banking can play a transformative role in financial inclusion and socio-economic development.
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