© rrrob - Fotolia.com

The typical retail consumer bank has its employees split into two primary areas of responsibility. Each of these areas are equally important because without one the other would likely cease to exist.

The two divisions are sales and operations. Sales is responsible for opening new accounts, taking in new loan applications, and reaching out to bring new customers into the institution. Operations on the other hand encompasses all of the functions that allow that customer to effectively interact with the bank once they become a customer. It is often mistaken that operations is merely a function of customer service, but the fact is that customer service is single subset of the entire function of retail banking

Retail banking operations is the way bankers refer to the people in the bank that make the bank “operate” on a daily basis. From scheduling staff levels all the way through making certain that there is enough cash in the vault to serve that daily needs of customers. Operations also includes ensuring the audit integrity of the bank and that all employees, including those within the Sales division, are complying with bank regulations, company regulations, and the regulations of the multiple regulatory
agencies that govern a bank.

Operations also includes the back office functions of the bank. The back office typically includes the following:

  • Automated Clearing House Processing
  • Cash Management
  • Regulatory Compliance – CRA, BSA, Reg Z, Reg CC, etc
  • Reports To Regulatory Agencies
  • Information Technology
  • Treasury Activities
  • All other internal banking departments.

The literal essence of retail banking operations is that it includes all aspects of the institution that ensure it functions as a bank on a daily basis.

This all encompassing definition may split with the structure of some retail banks. These banks consider functions such as treasury activities and high level cash management to be a corporate function, something set above the retail operations division. Each institution is certainly unique and can be designed in its own unique way, but traditionally the retail bank operations division includes all of these broad functions. This is also supported when examining the individuals within these departments the likelihood
is that they typically have operational and compliance backgrounds and therefore are more appropriately classified under the operations division.