: BANKING IN THE ERA OF GLOBALIZATION: WHY BANKERS SHOULD FOCUS ON ‘RELATIONSHIP BANKING’ WITH THEIR SMALL BUSINESS CUSTOMERS?

Abstract

The growing financial sophistication of customers, the greater and more efficient use of information technology and the increased types of institutions offering similar products and services in the market place have intensified competition in the banking industry in Malaysia. This competitive environment makes it a necessity for banks to focus more on establishing and maintaining relationships with customers. One important segment, the smaill business sector, however had not been given much attention by the banks. The small business slector is now a significant contributor to the country’s economy, and the banks may miss the opportunity of an emerging lucrative market if they fail to recognize the potential profitability that this sector provides. This paper reports on a study conducted among the small business owners in the relationships with their banks. The findings will provide banks with information on understanding the needs of the small business customers they serve or want to serve.