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Test: Retail Banking & Wealth Management - 2 - Bank Exams MCQ


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100 Questions MCQ Test Mock Test Series for JAIIB Exam 2025 - Test: Retail Banking & Wealth Management - 2

Test: Retail Banking & Wealth Management - 2 for Bank Exams 2024 is part of Mock Test Series for JAIIB Exam 2025 preparation. The Test: Retail Banking & Wealth Management - 2 questions and answers have been prepared according to the Bank Exams exam syllabus.The Test: Retail Banking & Wealth Management - 2 MCQs are made for Bank Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Retail Banking & Wealth Management - 2 below.
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Test: Retail Banking & Wealth Management - 2 - Question 1

Among the fundamental requirements for a sustainable good relationship, which item is the most important?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 1

The payment of interest and instalments/principal as per agreed terms is the most important among the fundamental requirements for a sustainable good relationship between the bank and the borrower.

Test: Retail Banking & Wealth Management - 2 - Question 2

Delivery channels in retail banking refer to the various ways through which customers can access and use banking products and services. These channels can be physical, such as bank branches, ATMs, and cash deposit machines, or digital, such as mobile banking, internet banking, and digital wallets. The availability and convenience of these channels are important factors in customer satisfaction and retention. Banks are constantly innovating and expanding their delivery channels to provide more choices and convenience to customers. The use of digital channels has seen significant growth in recent years due to their ease of use and accessibility.

Q. What is the difference between a PoS terminal and an ATM?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 2

The PoS terminals are predominantly used for payment of purchase transactions, while ATMs can be used for several other services like balance inquiry.

Test: Retail Banking & Wealth Management - 2 - Question 3

What is the objective of setting up retail loan processing centres by banks?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 3

The objective of setting up retail loan processing centres by banks is to provide end-to-end solutions for processing retail loans. These centres are fully supported by marketing personnel, panel lawyers, and approved valuers, and their workflows are designed to speed up the process of sanctioning retail loans.

Test: Retail Banking & Wealth Management - 2 - Question 4

Which of the following statements is correct?
(i) Banks and financial institutions need to transform their delivery model to add value for their customers
(ii) Consumers are no longer interested in physical channels to avail of financial services
(iii) Integrating and optimizing channel delivery can bring value to the banks and financial institutions
(iv) Providing good customer service is no longer important for banks and financial institutions

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 4

The banks and financial institutions need to transform their delivery model to add value for their customers and integrating and optimizing channel delivery can bring value to the banks and financial institutions.

Test: Retail Banking & Wealth Management - 2 - Question 5

Marketing Information Systems (MIS) are vital for the banking industry to gather, analyze and interpret data about customers, products and services, and market trends. MIS helps banks to understand the changing needs of customers and to design products and services that meet those needs. MIS also helps banks to track their competitors' activities and to adapt to changes in the market. With the help of MIS, banks can identify the most effective marketing channels and promotional strategies to reach their target audience. It also enables banks to make informed decisions, reduce costs, and improve profitability. Therefore, MIS is a crucial tool for banks to stay competitive and meet the demands of their customers.

Q. What are the data-gathering subsystems of MKIS?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 5

The three data-gathering subsystems of MKIS are Marketing research, marketing intelligence, and internal accounting.

Test: Retail Banking & Wealth Management - 2 - Question 6

What is profitability?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 6

Profitability is not just a measure of how much revenue a company generates. Profitability is specifically related to how much profit a company can generate relative to its expenses.

Test: Retail Banking & Wealth Management - 2 - Question 7

What is the main purpose of CRM in the banking industry?
(i) To identify and target profitable customers
(ii) To offer personalized services to High-Net-Worth Customers
(iii) To provide convenient locations for customers
(iv) To acquire new branches for expansion

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 7

Customer Relationship Management (CRM) is a strategy that enables banks to identify and target their most profitable customers.

Test: Retail Banking & Wealth Management - 2 - Question 8

Which of the following is not a reason for developing new products?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 8

Even though products may stay in the growth and maturity stages for a long period, they will eventually decline and need to be phased out. Therefore, the reason for developing new products is to survive in the market, achieve business objectives, and meet changing customer needs.

Test: Retail Banking & Wealth Management - 2 - Question 9

Why is sophistication in credit assessment necessary for banks?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 9

As lenders expand to lower income groups, sophistication in credit assessment is necessary to manage risk and accurately price loans.

Test: Retail Banking & Wealth Management - 2 - Question 10

ABC Bank has entered into a co-lending agreement with a Housing Finance Company (HFC) registered with the RBI. As per RBI guidelines, what is the requirement for the banks and NBFCs to enter into the Co-Lending Model (CLM)?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 10

As per the RBI guidelines, both banks and NBFCs are required to formulate Board approved policies for entering into the CLM and place the approved policies on their websites.

Test: Retail Banking & Wealth Management - 2 - Question 11

What is process improvement in banks aimed at achieving?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 11

Process improvement in banks aims to improve the bank's efficiency ratio by reducing the unit cost-to-value ratio of each activity or transaction, such as opening an account, creating a loan document package, or handling a specific type of transaction.

Test: Retail Banking & Wealth Management - 2 - Question 12

What is the first stage in implementing CRM in a bank?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 12

The first stage in implementing CRM is the identification of customers based on their products availed and the focus of the bank. This helps in focusing on the segment they want to target and effectively using the CRM system.

Test: Retail Banking & Wealth Management - 2 - Question 13

Why is a good Management Information System (MIS) important for decision-making in an organization?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 13

Decision-making is an integral part of any business and for decisions to be made adequately, it is vital for there to be a good information system since decisions are based on information available.

Test: Retail Banking & Wealth Management - 2 - Question 14

Which of the following statements is true regarding availing a home loan from a bank?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 14

No loan should be given in respect of properties meant for residential use but which the applicant intends to use for commercial purposes and declares so while applying for a loan.

Test: Retail Banking & Wealth Management - 2 - Question 15

Which wealth management product or service focuses on managing a client's investments in a diversified portfolio of securities?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 15

Portfolio management services in wealth management focus on managing a client's investments in a diversified portfolio of securities. This includes analyzing market trends, selecting appropriate investment options, and monitoring and rebalancing the portfolio over time.

Test: Retail Banking & Wealth Management - 2 - Question 16

The use of artificial intelligence (AI) and technology in retail banking has revolutionized the way banks interact with their customers. AI-powered chatbots are now used to provide customers with 24/7 support, reducing wait times and improving customer satisfaction. Personalized recommendations and offers are made to customers based on their transaction history and behaviour, resulting in higher sales and improved customer loyalty. Banks also use AI to detect and prevent fraud in real-time, enhancing the security of customer transactions.

Q. What was the next important milestone in the Indian banking industry after the introduction of ATMs and credit cards?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 16

The next important milestone after the introduction of ATMs and credit cards was the introduction of mobile banking primarily through SMS. The launch of smartphone Apps is mentioned as the most popular channel at present. Therefore, option a is the correct answer.

Test: Retail Banking & Wealth Management - 2 - Question 17

The use of artificial intelligence (AI) and technology in retail banking has revolutionized the way banks interact with their customers. AI-powered chatbots are now used to provide customers with 24/7 support, reducing wait times and improving customer satisfaction. Personalized recommendations and offers are made to customers based on their transaction history and behaviour, resulting in higher sales and improved customer loyalty. Banks also use AI to detect and prevent fraud in real-time, enhancing the security of customer transactions.

Q. What was the benefit of remote check deposit capture?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 17

The move to remote check deposit capture reduced the waiting period for check processing, adding convenience and making it possible for people to pay bills and make purchases faster than ever before.

Test: Retail Banking & Wealth Management - 2 - Question 18

The use of artificial intelligence (AI) and technology in retail banking has revolutionized the way banks interact with their customers. AI-powered chatbots are now used to provide customers with 24/7 support, reducing wait times and improving customer satisfaction. Personalized recommendations and offers are made to customers based on their transaction history and behaviour, resulting in higher sales and improved customer loyalty. Banks also use AI to detect and prevent fraud in real-time, enhancing the security of customer transactions.

Q. What is the function of Amelia, the humanoid robot developed by IPsoft?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 18

Amelia is a humanoid robot developed by IPsoft, which helps to channel key information from a wide variety of data and draw conclusions.

Test: Retail Banking & Wealth Management - 2 - Question 19

Which of the following is NOT an example of supporting software applications for retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 19

Technology in retail banking will also include supporting software applications like AML software, Loan Origination System, Credit Card Processing System, Data Warehouse, and Switch for alternate banking channels, and all these systems should be seamlessly integrated with the Core Banking solutions.

Test: Retail Banking & Wealth Management - 2 - Question 20

What is the role of CRISIL in BCSBI's rating of member banks?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 20

BCSBI takes the technical assistance of rating agency CRISIL to rate the member banks based on the data collected during the survey of select branches of member banks. CRISIL's role is to convert the data into a numerical score and assign weightage to different parameters.

Test: Retail Banking & Wealth Management - 2 - Question 21

What is the main objective of implementing a CRM program in retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 21

CRM can help identify customer segments that can be migrated to electronic and remote channels like ATMs to reduce operational costs and improve operational efficiencies.

Test: Retail Banking & Wealth Management - 2 - Question 22

Which of the following is the most appropriate definition of a bank product?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 22

A bank product can be defined as "Anything that can provide the satisfaction, use, and return desired by the customer."

Test: Retail Banking & Wealth Management - 2 - Question 23

Which of the following is not included under the head "Income from Salary"?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 23

As per Section 15 of the Income Tax Act, a salary that is due but not paid by the employer, paid but not due or paid before it became due or arrears of salary that were not paid in the previous year by the employer are considered as Income from the Salary.

Test: Retail Banking & Wealth Management - 2 - Question 24

What is the importance of human resource upgrades in banking operations?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 24

Offering an excellent, distinctive service is the only solution to improve the business prospects, and the customers of the bank expect the service to be delivered in a smooth, problem-free, efficient, and timely manner.

Test: Retail Banking & Wealth Management - 2 - Question 25

What is the role of BCSBI in monitoring the banking Codes and Standards adopted by banks?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 25

BCSBI functions as an independent and autonomous watchdog to monitor and ensure that the banking Codes and Standards voluntarily adopted by banks are adhered to, in true spirit by banks in delivering the services, as promised, to their customers.

Test: Retail Banking & Wealth Management - 2 - Question 26

Which of the following statements is incorrect regarding Direct Selling Agents (DSAs)?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 26

DSAs are primarily engaged in sourcing Credit Cards and Retail Loans and private sector banks rely on them to sell their retail products.

Test: Retail Banking & Wealth Management - 2 - Question 27

Why is the ‘People’ concept important in retail banking marketing?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 27

The ‘People’ concept is important in retail banking marketing because the effectiveness of the product depends on the effectiveness of the people delivering the product.

Test: Retail Banking & Wealth Management - 2 - Question 28

What is the basis of classification of the entire MRR/individual loans representing MRR as NPA in the books of the originating bank?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 28

If the originating bank acts as a servicing agent of the assignee bank for the loans transferred, it would know the overdue status of the loans transferred which should form the basis of classification of the entire MRR/individual loans representing MRR as NPA in the books of the originating bank, depending upon the method of accounting followed.

Test: Retail Banking & Wealth Management - 2 - Question 29

Which of the following statements is true regarding the customer grievance handling mechanism in banks?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 29

The customer may approach the Regional/Zonal Manager/Principal Nodal Officer at the address displayed at the branch if the complaint is unresolved at the branch level.

Test: Retail Banking & Wealth Management - 2 - Question 30

What is the purpose of portfolio appraisal?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 30

Portfolio appraisal involves the measurement of risk and return of securities from time to time and comparing it with expected risk and return.

Test: Retail Banking & Wealth Management - 2 - Question 31

What are the two traditional measures of profitability for a business?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 31

The two traditional measures of profitability for a business are Return on Assets (ROA) and Return on Equity (ROE).

Test: Retail Banking & Wealth Management - 2 - Question 32

Which of the following is a correct statement regarding the quantum of the loan?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 32

The quantum of the loan is either related to the product or the income of the individual, and it is expressed as multiples of income or asset value.

Test: Retail Banking & Wealth Management - 2 - Question 33

Marketing Information Systems (MIS) are vital for the banking industry to gather, analyze and interpret data about customers, products and services, and market trends. MIS helps banks to understand the changing needs of customers and to design products and services that meet those needs. MIS also helps banks to track their competitors' activities and to adapt to changes in the market. With the help of MIS, banks can identify the most effective marketing channels and promotional strategies to reach their target audience. It also enables banks to make informed decisions, reduce costs, and improve profitability. Therefore, MIS is a crucial tool for banks to stay competitive and meet the demands of their customers.

Q. What is the main purpose of an MKIS?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 33

The purpose of an MKIS is to gather and manage marketing information, which is important for making informed decisions and reacting rapidly to customer needs.

Test: Retail Banking & Wealth Management - 2 - Question 34

Marketing Information Systems (MIS) are vital for the banking industry to gather, analyze and interpret data about customers, products and services, and market trends. MIS helps banks to understand the changing needs of customers and to design products and services that meet those needs. MIS also helps banks to track their competitors' activities and to adapt to changes in the market. With the help of MIS, banks can identify the most effective marketing channels and promotional strategies to reach their target audience. It also enables banks to make informed decisions, reduce costs, and improve profitability. Therefore, MIS is a crucial tool for banks to stay competitive and meet the demands of their customers.

Q. What is the purpose of processing data in MKIS?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 34

The collected information needs to be processed using various statistical and operations research tools so that conclusions can be drawn for decision-making. The other options are mentioned as storing processed data, classifying, tabulating, and summarizing data, and evaluating the accuracy and reliability of the information.

Test: Retail Banking & Wealth Management - 2 - Question 35

Remittance products in banking refer to services that allow people to send money to others who are located in different geographical locations. These products are designed to facilitate the easy and secure transfer of funds between individuals, businesses, or institutions. Remittance products can be in the form of wire transfers, online transfers, mobile payments, or other electronic means. Banks offer different types of remittance products that cater to the specific needs of their customers. Some of these products come with fees while others are free. Overall, remittance products have made it easier and faster for people to transfer money across borders.

Q. What is the responsibility of the user institution in ECS Credit?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 35

It is the responsibility of the user institution to communicate to the beneficiary the details of credit that are being afforded to his/her account, indicating the proposed date of credit, amount, and related particulars of the payment.

Test: Retail Banking & Wealth Management - 2 - Question 36

Remittance products in banking refer to services that allow people to send money to others who are located in different geographical locations. These products are designed to facilitate the easy and secure transfer of funds between individuals, businesses, or institutions. Remittance products can be in the form of wire transfers, online transfers, mobile payments, or other electronic means. Banks offer different types of remittance products that cater to the specific needs of their customers. Some of these products come with fees while others are free. Overall, remittance products have made it easier and faster for people to transfer money across borders.

Q. What is the time limit for the beneficiary bank to credit the beneficiary's account upon receiving the fund’s transfer message in RTGS?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 36

The beneficiary bank has to credit the beneficiary's account within 30 minutes of receiving the fund’s transfer message in RTGS.

Test: Retail Banking & Wealth Management - 2 - Question 37

Remittance products in banking refer to services that allow people to send money to others who are located in different geographical locations. These products are designed to facilitate the easy and secure transfer of funds between individuals, businesses, or institutions. Remittance products can be in the form of wire transfers, online transfers, mobile payments, or other electronic means. Banks offer different types of remittance products that cater to the specific needs of their customers. Some of these products come with fees while others are free. Overall, remittance products have made it easier and faster for people to transfer money across borders.

Q. Why did India's rating decline in some parameters involving currency in circulation, according to the RBI report?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 37

The decline in India's rating in some parameters involving currency in circulation is explained by the increased demand for cash as a store of value during the Covid-19 pandemic-related lockdown and the slowdown in economic growth during 2020.

Test: Retail Banking & Wealth Management - 2 - Question 38

How does asset ownership differ in PMS and MFS?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 38

Under PMS, investors retain direct ownership of shares of the company. In Portfolio Management Services (PMS), investors have a personalized portfolio managed by a professional portfolio manager or a team. In this arrangement, investors directly own the individual securities or shares in their portfolio. The portfolio manager makes investment decisions on behalf of the investor but does not hold the ownership of the assets. On the other hand, in Mutual Funds (MFs), investors pool their money together, and the fund manager uses the pooled funds to purchase a diversified portfolio of securities. Investors in MFs are issued units of the fund proportionate to their investment, and they indirectly own a fraction of the assets held by the fund. In summary, PMS provides direct ownership of shares, while MFs offer indirect ownership through units in the fund.

Test: Retail Banking & Wealth Management - 2 - Question 39

As lenders expand to lower income groups, they require sophistication to accurately assess borrowers’ ability to repay and _____ the loan.

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 39

Lenders require sophistication to correctly price the loan as they expand to lower-income groups.

Test: Retail Banking & Wealth Management - 2 - Question 40

Why is efficiency important for bank operations?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 40

Efficiency is important for bank operations to respond to market needs and prepare for the future. Banks need to invest in technology, marketing, automation, and self-service capabilities to remain competitive in a rapidly changing industry environment.

Test: Retail Banking & Wealth Management - 2 - Question 41

Retail banking concepts, which primarily deal with providing banking services to individual customers, are applicable in any country where there is a significant population of individual customers. Retail banking differs from corporate or wholesale banking, which focuses on providing services to businesses, institutions, and large corporations. While retail banking involves services such as savings accounts, loans, credit cards, and mortgages, corporate banking includes services such as cash management, financing, and investment banking. The distinction between the two types of banking is important, as it helps banks to determine which types of services they should prioritize and which customer segments they should focus on.

Q. Which type of technology implementation has increased the availability of customer databases across products and increased the scope for cross-selling and up-selling other products?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 41

PSBs have re-engineered their technology initiatives and started implementing core banking solutions networking the customers and accounts in a single platform. The level of implementation of core banking has increased the availability of customer databases across products and has also increased the scope for cross-selling and up-selling other products.

Test: Retail Banking & Wealth Management - 2 - Question 42

Retail banking concepts, which primarily deal with providing banking services to individual customers, are applicable in any country where there is a significant population of individual customers. Retail banking differs from corporate or wholesale banking, which focuses on providing services to businesses, institutions, and large corporations. While retail banking involves services such as savings accounts, loans, credit cards, and mortgages, corporate banking includes services such as cash management, financing, and investment banking. The distinction between the two types of banking is important, as it helps banks to determine which types of services they should prioritize and which customer segments they should focus on.

Q. Which banking segment has more laborious monitoring and recovery processes?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 42

Monitoring and recovery of retail assets are more laborious because of the larger customer base as compared to corporate banking.

Test: Retail Banking & Wealth Management - 2 - Question 43

Retail banking concepts, which primarily deal with providing banking services to individual customers, are applicable in any country where there is a significant population of individual customers. Retail banking differs from corporate or wholesale banking, which focuses on providing services to businesses, institutions, and large corporations. While retail banking involves services such as savings accounts, loans, credit cards, and mortgages, corporate banking includes services such as cash management, financing, and investment banking. The distinction between the two types of banking is important, as it helps banks to determine which types of services they should prioritize and which customer segments they should focus on.

Q. What is the main difference between Retail Banking and Corporate Banking?
i. Retail banking is a B2C approach, while corporate banking is a B2B approach
ii. Retail banking deals mainly with corporate clients, while corporate banking targets the individual segment
iii. Retail banking is a mass market banking model, while corporate banking looks at a relatively smaller segment of the business/corporate client base as compared to the retail segment
iv. The ticket size of loans in retail banking is high, while the ticket size is low in corporate loans

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 43

Retail Banking is a mass-market banking model, whereas corporate banking looks at a relatively smaller segment of the business/corporate client base as compared to the retail segment.

Test: Retail Banking & Wealth Management - 2 - Question 44

Which of the following statements are correct regarding demat accounts?
(i) A minor can be a joint holder in a demat account
(ii) Demat account eliminates the risk of bad delivery, fake securities, delays, thefts, etc.
(iii) Holding investments in equity and debt instruments in a single account is not possible with a demat account
(iv) A bank providing depository services as a Depository participant does not require a certificate of registration from SEBI

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 44

A minor cannot be a joint holder in a demate account, and a bank providing depository services as a Depository participant must hold a certificate of registration issued by SEBI.

Test: Retail Banking & Wealth Management - 2 - Question 45

What was the purpose of the early proprietary cards issued by oil companies and consumer stores?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 45

The early proprietary cards issued by oil companies and consumer stores were issued basically to create customer loyalty and improve customer service.

Test: Retail Banking & Wealth Management - 2 - Question 46

Tax planning in banking involves developing strategies to minimize tax liabilities while maximizing returns on investments. It involves analyzing different investment options and selecting the ones that offer the most tax benefits. For instance, investing in tax-saving fixed deposits, mutual funds, or insurance policies can help reduce tax liabilities. Banks also offer tax-saving investment products such as National Savings Certificates (NSC), Public Provident Funds (PPF), and Equity-Linked Savings Schemes (ELSS) that provide tax deductions under various sections of the Income Tax Act. Additionally, banks may offer tax planning advice to their customers to help them optimize their tax savings while ensuring compliance with tax laws.

Q. When does the surcharge become applicable to the income tax liability of an individual?
I. When the total income is more than ₹1 crore
II. When the total income is more than ₹5 crore
III. When the total income is more than ₹22 crore

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 46

The surcharge becomes applicable on the income tax liability of an individual when the total income is more than ₹50 lakh (10% surcharge), more than ₹1 crore (15% surcharge), more than ₹5 crores (37% surcharge), and more than ₹22 crores (25% surcharge).

Test: Retail Banking & Wealth Management - 2 - Question 47

Which banks generally adopt the Strategic Business Unit (SBU) Approach in retail banking?
i. Public Sector Banks in India, ii. Old-generation private sector banks, iii. New-generation private sector banks, iv. Foreign banks

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 47

New-generation private sector banks and foreign banks generally adopt the Strategic Business Unit (SBU) Approach in retail banking.

Test: Retail Banking & Wealth Management - 2 - Question 48

The function of the Mergers & Acquisitions (M&A) group in investment banking is to _____.

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 48

The M&A group in investment banking provides advisory services to companies that want to buy or sell other businesses. This includes managing the entire M&A process, from identifying potential targets to negotiating deals and closing transactions.

Test: Retail Banking & Wealth Management - 2 - Question 49

How is a contactless card more secure?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 49

Contactless technology uses secure encryption (the same as CHIP and PIN) so it can be confidently used. Moreover, the card need not leave the customer's hand while in operation, which enhances the level of security.

Test: Retail Banking & Wealth Management - 2 - Question 50

Is premature redemption of Gold Bonds permitted?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 50

Pre-mature redemption of the Gold Bond is permitted from the fifth year of the date of issue on the interest payment dates.

Test: Retail Banking & Wealth Management - 2 - Question 51

What is the role of an "Obligor" in the context of securitization?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 51
  • An "Obligor" refers to a person who is liable, under a contract or otherwise, to pay a debt or receivables or to discharge any obligation related to a debt or receivables. This person's involvement in the securitization process could include being the source of the underlying assets (such as loans) that are being securitized. The securitization process involves transferring these performing assets to a Special Purpose Vehicle (SPV) for an immediate payment.
  • Sponsor: means any person who establishes or promotes a special purpose distinct entity.
  • Originator: refers to a bank or company that transfers from its balance sheet a single asset or a pool of assets to an SPV as a part of a securitization transaction and would include other entities of the consolidated group to which the bank belongs.
  • Special Purpose Vehicle (SPV): means any company, trust, or other entity constituted or established for a specific purpose-(a) activities of which are limited to those for accomplishing the purpose of the company, trust or other entity as the case may be; and (b) which is structured in a manner intended to isolate the corporation, trust or entity as the case may be, from the credit risk of an originator to make it bankruptcy remote.
  • Therefore, the correct answer is option (c).
Test: Retail Banking & Wealth Management - 2 - Question 52

Chose the correct statement

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 52

Statement Ⅰ: Incorrect

  • There are 4 Business Process Models in Retail Banking (i.e. Horizontally Organized, Vertically Organized, Predominately Horizontally Organized, and Predominately Vertically Organized).

Statement Ⅱ: Incorrect

  • In Vertically Organized Model centralized database is used across products.

Statement Ⅲ: Correct

  • Horizontally Organized Model provides end-to-end solutions product-wise.
Test: Retail Banking & Wealth Management - 2 - Question 53

Which of the following features matches with the cross selling phenomenon?
I. Cross selling increases the cost of acquisition.
II. Cross selling generate good profit
III. Cross selling fosters brand loyalty.

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 53

Cross Selling means selling one or more additional products to the existing customer base so as to generate more business and profit per customer.
Some of the features of cross selling are:-

  • The prime point for cross selling is the cost factor. It zeroes in on the cost of new customer acquisition for asset expansion and the cost of cross selling to an existing customer.
  • The second important reason is the profit. Cross selling an asset/additional asset product to an existing customer improves the profits, in general, and profits per customer, in particular.
  • Cross selling fosters brand loyalty. A customer who has availed himself of more than one product from the bank is drawn closer to the bank than a customer who has taken only one product.
  • Cross-selling helps banks to plan, implement and maintain better customer relationship management programmes (CRM) as it gives clarity to developing plans based on the customers' relationship profile.

Thus, the correct option is (b).

Test: Retail Banking & Wealth Management - 2 - Question 54

What are White Label ATMs (WLAs) in the context of banking services?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 54

White Label ATMs (WLAs) are ATMs set up, owned, and operated by non-bank entities. These ATMs provide banking services to customers of various banks based on their issued cards. The non-bank entities incorporated in India under the Companies Act 1956 are allowed to establish WLAs.

White Label ATMs (WLAs) are a type of automated teller machine that is owned, operated, and managed by non-bank entities. These entities could include independent companies, retail chains, payment solution providers, and other non-banking financial institutions.

The concept of WLAs was introduced to expand the reach of banking services in India, particularly in areas where traditional bank branches are not easily accessible.

Key Features of White Label ATMs:

  • Ownership and Operation: Unlike traditional ATMs, which are typically owned and operated by banks, WLAs are owned by non-bank entities. These entities are often referred to as White Label ATM Operators (WLAOs). The WLAOs are responsible for setting up, maintaining, and managing these ATMs.
  • Services Offered: White Label ATMs provide a range of banking services similar to those offered by bank-owned ATMs. These services include cash withdrawal, balance inquiry, fund transfers, and sometimes even value-added services like bill payments and mobile recharges.
  • Access to Multiple Banks: WLAs offer services to customers of various banks. Customers can use their debit, credit, or prepaid cards issued by different banks to carry out transactions at these ATMs. This promotes interoperability and provides greater convenience to customers.
  • Location and Accessibility: WLAs are strategically placed in various locations to improve accessibility. They are often located in retail outlets, malls, transportation hubs, and other high-traffic areas, making it easier for customers to access banking services.
  • Regulation and Compliance: The Reserve Bank of India (RBI) regulates the establishment and operation of White Label ATMs. Non-bank entities that wish to set up WLAs need to comply with specific guidelines and regulations set forth by the RBI to ensure the security and reliability of the ATM network.
  • Challenges: While WLAs have contributed to expanding banking services to underserved areas, there have been challenges related to maintaining uptime, cash availability, and technical issues. The WLAOs need to establish connectivity with the shared ATM network operators and payment networks to ensure seamless transactions.
  • Competition and Innovation: The introduction of WLAs has introduced competition in the ATM space, leading to innovations in service delivery and customer experience. WLAOs often focus on improving technology, enhancing user interfaces, and providing value-added services to attract customers.
  • In summary, White Label ATMs play a significant role in extending banking services to areas where traditional bank branches are not feasible. They are owned by non-bank entities and offer a variety of services to customers from different banks. Despite some challenges, WLAs have contributed to enhancing financial inclusion and customer convenience in India's banking landscape.

Hence Option (a) is correct

Test: Retail Banking & Wealth Management - 2 - Question 55

What is the primary difference in service delivery approach between new private sector banks and public sector banks in the context of retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 55
  • In new private sector banks, the internal customer is more focused on service delivery, and staff members possess characteristics like understanding the customer's profile and cross-selling the right products.
  • On the other hand, in public sector banks, service delivery is more personalized and caring, with better personal understanding of customers' profiles and loyalty factors.
  • The primary difference here is that new private sector banks prioritize understanding the customer's profile and needs, while public sector banks emphasize post-sales service follow-up and better product and service delivery.
  • Hence Option (d) is correct
Test: Retail Banking & Wealth Management - 2 - Question 56

Which of the following funds allow a person to invest with some lock-in period, mostly within 1 to 3 years?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 56
  • Further, on the basis of structure, mutual funds are classified into,
  • Open Ended Fund- These are funds that allow you to invest money and redeem anytime as per one's needs and one's strategies regardless of any time circumstances.
  • Close ended Funds- These are funds allowing a person to invest with some lock-in period, mostly within 1 to 3 years; before that one cannot redeem the fund since there is a time-bound investment horizon involved with it.
  • Thus, the correct option is (a).
Test: Retail Banking & Wealth Management - 2 - Question 57

Read the following statement and choose the correct option:
Statement I: The goal of channel optimization is to assess the various ways customers interact with a bank in order to create a cost-effective combination that is adapted to each bank's specific customer base.
Statement II: Channel optimization should not be about branches alone, as contact centres, online and mobile banking, ATMs, and relationship managers also are important channels for customers.

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 57
  • The goal of channel optimization is to assess the various ways customers interact with a bank in order to create a cost-effective combination that is adapted to each bank's specific customer base. Given the rapidly changing nature of customer channel preferences, this process of optimization requires branches to be fairly aggressively closed, consolidated, sold, and bought as banks adjust their physical geographic presence. Many banks also are significantly reconfiguring roles, duties, and staffing within the branches and employing new metrics for analysing branch performance and value.
  • Channel optimization should not be about branches alone, as contact centres, online and mobile banking, ATMs, and relationship managers also are important channels for customers. Banks are working to enhance their contact centres via better operating hours and technical knowledge, as well as their chat, text, and social media capabilities in order to meet customers' changing expectations and ensure virtual availability for customer service and assistance.
  • Again, there is no one-size-fits-all approach. Some banks assertively promote electronic account openings, remote deposit capture via smart devices, and accounts that are designed to be virtually paperless.
  • Hence, the correct answer is option (d).
Test: Retail Banking & Wealth Management - 2 - Question 58

ABC Bank has introduced a special credit card with a special reward of 1 crore premium for personal accident cover to attract the customers. Under which category of customer needs the product falls?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 58

Maslow has defined five needs of individuals in their various stages of life. The needs start from the basic requirements and move up the value chain during the life stage progression. If banks

structure products and services to match the different stages in the need spectrum, banks will achieve the twin objectives of customer satisfaction and business conversion.

Physiological Needs contains :-

  • Core Savings Accounts
  • Personal Accident Cover
  • Housing Loans

Thus, the correct option is (b)

Test: Retail Banking & Wealth Management - 2 - Question 59

Mary is a successful business owner who has accumulated a substantial amount of wealth over the years. She is concerned about the tax implications of passing her assets to her heirs. Which of the following strategies can Mary use to minimize the tax burden on her heirs?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 59

Estate planning is an essential aspect of wealth management. Making annual gifts, establishing a trust, and donating to charity are all strategies that can help reduce the tax burden on heirs and ensure that assets are distributed according to the individual's wishes.

Test: Retail Banking & Wealth Management - 2 - Question 60

For Risk Management, banks shall have a risk based approach which includes which of the following factors?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 60

For Risk Management, banks shall have a risk based approach which includes the following:

  • Customers shall be categorized as low, medium and high risk categories, based on the assessment and risk perception of the bank.
  • Risk categorisation shall be undertaken based on parameters such as customer's identity, social/ financial status, nature of business activity, and information about the client's business and their location, etc. While considering the customer's identity, the ability to confirm identity documents through online or other services offered by issuing authorities may also be factored in.

Thus, the correct option is (d)

Test: Retail Banking & Wealth Management - 2 - Question 61

In which of the following is it possible for an investor to take a short position?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 61

A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price. A trader may decide to short a security when she believes that the price of that security is likely to decrease in the near future. To take a short position in shares of the investor, the type of security, the future prospectus of the Security, and options available to meet the liquidity etc. are the vital factors.

Test: Retail Banking & Wealth Management - 2 - Question 62

In debt schemes, __________ risk is the risk of changes in interest rates, which can impact the value of the scheme's underlying securities.

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 62

In debt schemes, market risk is the risk of changes in interest rates, which can impact the value of the scheme's underlying securities. If interest rates rise, the value of the underlying securities falls, and vice versa. This risk is known as interest rate risk.

Test: Retail Banking & Wealth Management - 2 - Question 63

Which one of the following is not included under Retail Banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 63

Financing to Corporates by the Banks comes under Corporate Banking, not Retail Banking.

Test: Retail Banking & Wealth Management - 2 - Question 64

Which of the following is/are eligible for Sovereign Gold Bonds (SGBs)?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 64

Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. They are substitutes for holding physical gold.

People eligible for the Scheme are:-

  • Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB.
  • Eligible investors include individuals, HUFs, trusts, universities, charitable institutions, etc.
  • A minor can also invest in SGB but the application is to be made by his/her guardian on behalf of the minor.

Thus, the correct option is (c).

Test: Retail Banking & Wealth Management - 2 - Question 65

Anushree Pandey is a young working professional who recently got a promotion in her job. She wants to apply for a credit card to manage her expenses and build her credit score. She has no prior experience of using credit cards. Anushree wants to make a large purchase on her credit card. Which of the following is the best practice to follow to avoid high-interest charges?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 65

Making the minimum payment due or carrying forward the balance to the next billing cycle can lead to high-interest charges and negatively impact the credit score. It is always advisable to pay the entire amount due on the card before the due date to avoid interest charges.

Test: Retail Banking & Wealth Management - 2 - Question 66

What is a key feature of cash recycling machines that contributes to operational efficiency?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 66

Cash recycling machines provide a consistent and reliable counting of cash, along with the detection of counterfeit notes during both cash deposits and cash withdrawals.
This feature contributes to operational efficiency and security in the transactions.

Features and Benefits of Cash recycling machines:

  • Cash Deposits and Withdrawals: Cash recycling machines allow customers to both deposit and withdraw cash in a single device. This convenience eliminates the need for separate machines for these functions.
  • Operational Efficiency: One of the primary advantages of cash recycling machines is their ability to recycle deposited cash for future withdrawals. This reduces the frequency of cash replenishment and cash loading, leading to operational efficiency and cost savings for banks.
  • Reduced Idle Cash: Traditional ATMs often have a surplus of idle cash, which can result in inefficiencies. Cash recycling machines optimize the use of deposited cash for withdrawals, minimizing the amount of idle cash held within the machine.
  • Counterfeit Detection: Cash recycling machines are equipped with advanced sensors and mechanisms for accurate and reliable counting of cash. They can also detect counterfeit or fraudulent notes during both deposit and withdrawal transactions.
  • 24/7 Availability: Similar to regular ATMs, cash recycling machines provide round-the-clock access to banking services, allowing customers to deposit or withdraw cash at their convenience, even outside of banking hours.
  • Value-Added Services: Some cash recycling machines may offer additional services such as bill payments, funds transfers, and balance inquiries, providing customers with a comprehensive self-service experience.
  • Customer Retention and Acquisition: The ability to offer cash deposit services after banking hours can attract new customers and retain existing ones who prefer the flexibility of using banking services beyond traditional business hours.
  • Enhanced Security: Cash recycling machines enhance security by accurately tracking and recording all transactions, reducing the risk of errors and discrepancies.
  • Customization and Integration: Financial institutions can customize cash recycling machines to suit their branding and customer preferences. These machines can also integrate with existing ATM networks and banking systems.
  • Eco-Friendly: The recycling feature of these machines reduces the need for frequent cash shipments and handling, which can contribute to an eco-friendlier banking process.

Cash recycling machines have become increasingly popular as they offer a balanced solution for optimizing cash flow, enhancing customer experience, and improving operational efficiency for both customers and financial institutions.

Hence Option (c) is correct

Test: Retail Banking & Wealth Management - 2 - Question 67

Among the given, on which of the following factor the success of the retail banking in India doesn't depends?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 67

Among the given, on the following factors the Success of Retail Banking depends.

These are:

  • Presence of an efficient delivery mechanism
  • Product appropriateness
  • Pricing
  • Scoring models for assessing the credit worthiness
  • Consumer protection environment

So, among the given, the factor like Marketing techniques applies for the product doesn't have any impact on determining the success for retail banking.

Test: Retail Banking & Wealth Management - 2 - Question 68

_______________are generally defined as private individuals with more than USD 1 million or ₹ 7 crore of investable assets.

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 68
  • Growth of HNWI and UHNWI: High Net Worth Individual (HNWI) are generally defined as private individuals with more than USD 1 million or ₹ 7 crore of investable assets.
  • Ultra-High Net Worth Individuals (UHNWI) are private individuals with more than USD 30 million or ₹ 200 crore of invest-able assets.
  • Hence, option (a) is the correct choice.
Test: Retail Banking & Wealth Management - 2 - Question 69

Among the below given statements which of the following is correct in context to marketing channels?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 69

The following are the correct statements:

  • Customer satisfaction has to happen through different channels and choices are to be offered to customers to experience the optimum channel mix for maximum satisfaction.
  • Multi - channel distribution is the practice adopted by almost all banks for total customer experience.
  • Each channel either direct or remote has its pluses and minuses and also depends on the customer segments using the different channels.
  • Direct channels may be the best fit for a conservative customer whereas young and tech savvy customers may opt for remote channels.

Hence, option (a) is the correct choice.

Test: Retail Banking & Wealth Management - 2 - Question 70

A small retail business sells handmade beauty products online. A customer files a lawsuit against the business, claiming that one of the products caused a severe allergic reaction. What type of retail liability product would provide coverage for this situation?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 70

The situation described involves a claim of product liability, where a customer alleges that a product caused harm or injury. Product liability insurance provides coverage for losses or injuries resulting from defective products, including the cost of legal defense in a lawsuit. This type of insurance is important for any business that sells products, including online retailers.

Test: Retail Banking & Wealth Management - 2 - Question 71

Among the given, which of the following statement is/are correct?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 71

The repayment period may vary from 3yrs to 30 yrs depending on the purpose.

  • Loans for personal expense are to be repaid within 3 years.
  • Auto loans are given for duration of 5 to 7 years;
  • Housing loans for 5 to 30 years.

Hence, above the given all the statements are correct.

Test: Retail Banking & Wealth Management - 2 - Question 72

Among the given, under which section of CICRA Act 2005, CIC may seek and obtain credit information from its members (Credit Institution / CIC) only?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 72

Presently in India, a total of four CICs Credit Information Bureau (India) Limited, Equifax Credit Information Services Private Limited, Experian Credit Information Company of India Private Limited, CRIF High Mark Credit Information Services Private Limited have been granted Certificate of Registration by RBI. In terms of Section 15 of the Credit Information Companies (Regulation) Act, 2005 (CICRA), every Credit Institution shall become member of at least one CIC. Further, Section 17 of CICRA stipulates that a CIC may seek and obtain credit information from its members (Credit Institution / CIC) only. As a result, when a Specified User, as defined in CICRA and Credit Information Companies Regulations, 2006, obtains credit information on a particular borrower/client from a CIC, it gets only such information that has been provided to the CIC by its members.

Test: Retail Banking & Wealth Management - 2 - Question 73

Which committee emphasized the establishment of an apex-level Institute for the development and research of Information Technology applied to the financial sector, with a specific focus on banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 73
  • The Reserve Bank of India constituted a committee on "Technology Upgradation in the Payments System" in the year 1994 under the Chairmanship of Shri W. S. Saraf, the then Executive Director of RBI. This committee emphasized the need for the establishment of an apex-level Institute focused on development and research in the area of Information Technology applied to the financial sector, with a specific focus on banking. The committee's report, submitted in December 1994, led to the recommendation and establishment of the Institute for Development and Research in Banking Technology (IDRBT) in order to spearhead technology absorption in the banking and financial sector of the country.
  • Hence, the correct answer is option (a).
Test: Retail Banking & Wealth Management - 2 - Question 74

Which of the following statement not correct regarding the areas of improvement for better operating efficiencies?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 74

Statement a: Incorrect

  • Channel optimization should not be about branches alone, as contact centres, online and mobile banking, ATMs, and relationship managers also are important channels for customers. Banks are working to enhance their contact centres via better operating hours and technical knowledge

Statement b: Correct

  • In addition to reducing process costs, automation tools can help improve staff productivity, enabling banks to handle more transactions and greater volumes of activity with the same number of personnel. But productivity improvement is not dependent on technology alone.

Statement c: Correct

  • Channel optimization: The goal of channel optimization is to assess the various ways customers interact with a bank in order to create a cost-effective combination that is adapted to each bank's specific customer base.
Test: Retail Banking & Wealth Management - 2 - Question 75

Credit Information Companies (CICs) typically build scores using which of the following historical data files?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 75

A credit scoring model is a mathematical model used to estimate the probability of default, which is the probability that customers may trigger a credit event (i.e. bankruptcy, obligation default, failure to pay, and cross-default events). In a credit scoring model, the probability of default is normally presented in the form of a credit score. The higher score refers to a lower probability of default and vice versa. Credit Information Companies ( CICs) typically build scores using three historical data files:

  • Defaults on previous credit transactions.
  • Payment behaviour/Payment history.
  • Previous searches/inquiries.

Thus, the correct option is (b).

Test: Retail Banking & Wealth Management - 2 - Question 76

John is a conservative investor who is nearing retirement. Which of the following investment options is most appropriate for him?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 76

Conservative investors like John often prioritize safety and stability over growth potential. Long-term bonds are a relatively safe investment option that provide a fixed rate of return over a specified period of time, making them an attractive choice for investors who are nearing retirement or who have a low risk tolerance.

Test: Retail Banking & Wealth Management - 2 - Question 77

Consider the following statements and choose the correct answer.
I. Implementation of CRM in the business requires no technological upgradation.
II. CRM tools with marketing automation capabilities can automate repetitive tasks to enhance marketing efforts to customers at different points in the lifecycle.

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 77

Statement I: Incorrect

  • Using CRM systems requires changes in infrastructure of the organization as well as deployment of new technologies such as business rules, databases and Information Technology. Therefore, technological upgradation is necessary in CRM implementation

Statement II: Correct

  • CRM tools with marketing automation capabilities can automate repetitive tasks to enhance marketing efforts to customers at different points in the lifecycle. For example, as sales prospects come into the system, the system might automatically send them marketing materials, typically via email or social media, with the goal of turning a sales lead into a full-fledged customer.
Test: Retail Banking & Wealth Management - 2 - Question 78

X is a marketing manager at a bank. The bank has been offering traditional savings accounts and fixed deposits for many years. However, he has noticed that customer preferences are shifting towards more digital and convenient banking options. What step will you take regarding such a problem?

Detailed Solution for Test: Retail Banking & Wealth Management - 2 - Question 78
  • Any product has to normally pass through the various stages of a product life cycle. It goes without saying that even though the products stay in the growth and maturity period longer for long term survival of the product, still any product has to decline and to be phased out over a period with very rare exceptions. The Valve Radio and Record Player are classic examples of death of products. Though stereo cassette recorders as a product class were in the maturity stage of the product life cycle for a long period, they had been replaced by MP3s, MP4s, DVDs, etc., through technological innovations.
  • Now, these products are also past the maturity phase and presently is being replaced by music being available in the digital platform. The success of the marketer will be to correctly identify the existing phase of the product life cycle and by correctly foreseeing the future, has to develop new products which will go through the introduction phase and jump to the growth phase when the old product starts its decline phase. This will enable the organization to survive and achieve the business objectives.
  • Thus a proactive marketer should particularly watch the product life cycle of the product and the present stage of the product. New product development is an important area for the marketer to survive and grow. Bank marketer is not an exception. The bank marketer has to constantly watch the market, gauge the changing needs of the customer, compare it with the features of the existing product range, check-up whether there is scope for developing new products and have to immediately start developing new product and market them to proactively seize the emerging, changing customer needs.
  • Hence, the correct answer is option (b).