CASES IN FINANCE – Episode 15: Banking in 2026: “The Retail Banking Strategy”

By  Enock Yeboah-Mensah

The boardroom was charged with anticipation. On the table before them were numbers, projections, and policies, but behind each figure lay a deeper question: could Apogee Bank’s 2026 retail strategy withstand real-world shocks from the Bank of Ghana? Theocharis knew the answer wasn’t just about policy on paper; it was about behavior, discipline, and operational rigor.

Conditional fee waivers, digital adoption, and treasury deployment weren’t abstract strategies; they were levers designed to protect profitability, ensure deposit stability, and align customer behavior with the bank’s financial goals. As the directors leaned in, every question asked and every chart displayed became a test of the bank’s resilience.

“Ladies and gentlemen,” Theo began, “our retail strategy is simple: fee waivers are conditional, not universal. Customers earn them only if they meet one or more criteria: maintaining a minimum balance, salary domiciliation, or engaging in digital activity.

Dormant or inactive accounts automatically pay standard fees.” The Audit and Internal Control Committee Chair cleared his throat, leaning forward. “Theo, your strategy looks solid on paper, but I’m concerned about operational risks. Let’s talk about four specific areas: fee leakage, costly cash usage, dormant accounts, and potential channel abuse. How will the bank mitigate these risks while implementing conditional fee waivers?”

Theo nodded, acknowledging the seriousness of the question. “Absolutely. We’ve designed strengthened risk controls to address these concerns, and our newly established Data Analytics team plays a pivotal role in monitoring and enforcing them:

To address Fee Leakages, we will cap the number of free transactions per month. Even if a customer meets the conditions for free banking, they cannot exceed the allowed free transaction threshold. The Data Analytics team tracks all transaction patterns in real time, flagging any anomalies to ensure predictable revenue and prevent abuse. This ensures predictable revenue and prevents abuse of the system.

Teller and cash-handling fees remain intact. Free banking does not extend to cash transactions at branches, which are cost-intensive. The analytics team monitors branch activity and identifies high-cost cash usage, guiding incentives to promote digital adoption and reduce operational expense.

Accounts that become inactive automatically revert to standard fees. Free banking is earned on a monthly basis, not on a permanent basis. This prevents erosion of fee income from low-activity accounts.

The Data Analytics team continuously scans for low-activity accounts and triggers auto-reversion to fees, preventing erosion of fee income. In order to prevent channel abuse, fee waivers are strictly digital. Customers cannot exploit in-branch transactions to bypass fees. This also strengthens our digital adoption strategy and reduces costly branch operations.

“In combination, these measures preserve profitability, align customer behavior with operational goals, and leverage our Data Analytics team to reinforce controls in real time. We’ve also built monitoring dashboards to flag anomalies in real time, so any unusual activity triggers immediate review by Finance and Compliance.” The Chair leaned back, “Good. I like that the controls are behavior-driven and enforceable. Let’s ensure the monitoring dashboards are active before the full rollout.” Theo smiled, “Agreed. The dashboards are ready for Q1, and the data analytics team will conduct a weekly review until we’re confident the controls are functioning perfectly.”

A director raised an eyebrow. “Theo, CRR and MPR fluctuate. How resilient is this strategy under policy volatility?” Theo clicked the first slide: “Apogee Bank is conservative. Our loan-to-deposit ratio will remain below 45%, so CRR is fixed at 25%. Deployable deposits are stable at GHS 6 billion. Our stress-tests now focus entirely on MPR variations, from 11% to 25%.” Assumptions for Stress-Test

• Total retail deposits: GHS 15 billion
• CRR: 25% ? sterilized deposits = GHS 3.75 billion
• Deployable deposits: GHS 6 billion
• Conditional fee waivers apply only to active, profitable accounts
• Base MPR: 18%

Theo gestured toward the table, where the projected figures for 2026 were displayed in bold, clear numbers. “Directors, take a moment to absorb what these numbers are telling us,” he began, his voice measured but confident. “Notice the stability of our fee income: it remains consistent at GHS 300–310 million per month. This is not accidental.

Our conditional fee waiver policy ensures that only accounts that are active, transacting regularly, and profitable earn free banking. Dormant accounts, inactive users, or those who fail to meet minimum criteria automatically pay standard fees. This approach creates a self-regulating mechanism: the more engaged and valuable the customer, the more they are rewarded, but there is no blanket waiver that undermines revenue.”

He paused, letting the point sink in, then moved to the next projection. “Meanwhile, treasury earnings are sensitive to MPR, which is exactly how they are designed to function. Deployable deposits, our GHS 6 billion pool, are actively invested in high-quality BoG instruments.

As MPR rises or falls, these instruments absorb the macroeconomic shocks, effectively stabilizing the bank’s overall earnings. Even with our conservative lending posture, where the LDR is kept below 45%, we see that net interest margin remains intact, and high-value depositors continue to stay loyal. This combination of conditional retail fee income and treasury performance creates a balanced, resilient revenue model.”

The Risk Committee Chair leaned forward, the concern on his face evident. “Theo, if rates were to drop aggressively, say, all the way to 11%, wouldn’t treasury earnings fall sharply?”

Theo clicked to the next dashboard slide, a colorful, interactive visualization of deployable deposits against projected treasury yield. “You are correct; treasury earnings do decline in a low-rate environment, from GHS 550 million to approximately GHS 520 million per month. However, notice the stabilizing effect of fee income, it remains robust at GHS 300 million.

This is the real power of our behavior-driven fee waiver system: it acts as a shock absorber, cushioning the impact of macroeconomic headwinds. Retail operations continue to provide predictable cash inflows, protecting our margins even when policy rates are low.”

Another director, curiosity piqued, asked:

“And conversely, Theo, what happens if MPR rises sharply to 25%?” Theo switched to a side-by-side chart illustrating treasury earnings and fee income against different MPR scenarios. “In a high-rate scenario, treasury earnings rise substantially, from GHS 550 million to GHS 630 million per month. Fee income remains steady at GHS 310 million because the conditional waiver ensures that only behaviorally aligned, profitable accounts benefit from free banking.

Net interest margin improves slightly to 3.35%, and while deposit retention dips marginally due to rate-sensitive customers moving funds, our core, high-value, active segment remains loyal. Essentially, the same mechanism that cushions us in low-rate environments enhances profitability in high-rate environments. Conditional free banking ensures that customer behavior consistently aligns with profitability, regardless of policy direction.”

Finance Lens

Episode 15 demonstrates how a conditional retail banking strategy, conservative balance sheet management, and treasury strategy work together to create a resilient revenue model.

By tying fee waivers to customer behavior, only active and profitable accounts benefit, protecting fee income from leakage and creating a self-regulating revenue stream. This approach reduces reliance on blanket waivers and ensures that retail operations contribute predictably to the bank’s profitability.

Treasury operations act as a shock absorber, with GHS 6 billion of deployable deposits invested in BoG instruments. When MPR falls, treasury earnings decline modestly, but stable retail fee income cushions the impact. Conversely, rising MPR enhances treasury returns, improving net interest margins without jeopardizing liquidity. Combined with conservative lending that keeps the LDR below 45%, the bank maintains strong liquidity while deploying funds strategically.

Finally, risk controls are embedded through policy and Data Analytics monitoring, covering fee leakage, costly cash usage, dormant accounts, and channel abuse. Analytics dashboards track real-time transactions, flag anomalies, and guide corrective actions, strengthening internal controls and ensuring compliance.

By integrating behavioral incentives, analytics oversight, and treasury management, the bank’s strategy creates a dual-layer buffer that preserves profitability and liquidity even under wide-ranging macroeconomic volatility.

Moment of Clarity

Theo’s walk through the numbers triggered a moment of clarity for the board:“Fee income isn’t merely a byproduct of customer transactions; it is a controllable, strategic lever when conditionality and analytics are applied. Treasury deployment isn’t passive, it’s a dynamic shock absorber.” The key realization was that profitability no longer depends solely on lending or interest rate spreads. Instead:

• Conditional free banking aligns customer behavior with bank objectives, turning retail operations into a predictable revenue source.
• Data Analytics enables real-time oversight, ensuring operational discipline and reinforcing controls.
• Treasury strategy and conservative lending absorb macroeconomic shocks, stabilizing net interest margins and ensuring deposit retention among high-value clients.

For the board, the numbers illuminated a simple truth: profitability, resilience, and customer engagement are intertwined. Free banking can be “free” for the customer only if it is profitable for the bank, and with disciplined analytics, conditionality, and treasury deployment, this is achievable even in volatile policy environments.

The room understood this was not just a policy rollout, but a mechanism for strategic stability, capable of weathering both low and high interest rate scenarios while maintaining the bank’s operational and financial integrity.

The Chairman tapped the table, a satisfied smile breaking across his face. “So to summarize: with CRR fixed at 25%, lending kept conservative, and MPR fluctuating between 11% and 25%, profitability is preserved, margins are protected, and deposit stability is maintained.

Free banking isn’t free, but with the discipline, conditionality, and treasury deployment we’ve designed, it is profitable and resilient.” Theo allowed himself a small, quiet smile. As he looked across the boardroom, he felt the weight of the numbers and the clarity of the strategy speak louder than any presentation could.

The room now understood that this was not just a policy, but a finely tuned mechanism of operational resilience, ready to weather both low and high interest rate environments while keeping customers engaged and the bank profitable.

Discussion Questions

1. How effective is a conditional fee waiver policy in aligning customer behavior with bank profitability, and what risks could arise if conditions are too lenient or too strict?
2. How do fee leakage, costly cash usage, dormant accounts, and channel abuse impact retail banking profitability, and how can data analytics strengthen internal controls to mitigate these risks?
3. Considering the stress-test scenarios with MPR ranging from 11% to 25%, how does the combination of retail fee income and treasury earnings protect the bank’s net interest margin and deposit retention?
4. Why is maintaining a conservative loan-to-deposit ratio (LDR < 45%) critical for stability, and how does it interact with CRR requirements and deployable deposits in a volatile interest rate environment?
5. What are the potential trade-offs between customer satisfaction (through free banking) and profitability, and how does conditionality ensure that free banking benefits are sustainable for the bank?

Previous Case (Episode 14) Discussion Questions Solutions

Godfred argues that everyone sells time, not just labour or talent. How does viewing your career as the sale of time rather than effort change how you evaluate your current job, pay, and long-term career choices?

Seeing your career as the sale of time shifts the focus from effort or hours worked to value created per unit of time. Instead of measuring success by long hours or immediate output, you evaluate your role based on:

• Market value of your skills: Are your skills scarce, difficult to replace, or in high demand?
• Return on investment of time: Are the hours you spend generating income proportionate to your expertise and future growth?
• Strategic career choices: You may prioritize roles that offer mentorship, skill-building, or exposure over high immediate pay, because these increase the value of future hours.

Implication: People stop thinking “I need to work more hours to earn more” and instead ask, “How do I make each hour more valuable?” This reframes career planning, job selection, and even negotiation for pay or promotions.

Where do dignity and personal values fit into the way people price and sell their time? Can increasing the value of one’s time coexist with ethical and social responsibility? Why or why not?

Dignity and personal values directly influence how individuals price their time:

• Ethical boundaries: High-value time doesn’t require compromising morals. Choosing clients, projects, or industries carefully ensures you earn without undermining your principles.
• Sustainable respect: Selling time in alignment with values builds trust, reputation, and long-term loyalty, which in turn increases market value.
• Coexistence with ethics: Increasing your time value is not inherently unethical. It’s about improving skill, reliability, and impact. Ethical behavior often magnifies value because others are willing to pay a premium for trustworthiness and integrity.

Conclusion: Financial success and ethical standards are not mutually exclusive. In fact, a principled approach compounds time value by building reputation and sustainable demand.

Education, skills, and reputation are described as capital investments. Looking at your own life, which investments have increased the value of your time, and which have not delivered the expected return?

Investments in oneself operate like financial capital: they require upfront effort, cost, or sacrifice but pay long-term returns in higher hourly value.

• Effective investments: Advanced certifications, formal education, professional networks, mentorship, or specialized skills increase your ability to command higher rates or salaries.
• Ineffective investments: Courses or degrees unrelated to market needs, superficial skill accumulation, or passive learning may fail to boost your time’s value.
• Personal reflection: Identify where you’ve spent time or money that didn’t improve earning power or market value, and redirect focus toward high-impact skill acquisition or reputation-building.

Implication: Treat time spent on self-development strategically like capital allocation ensuring maximum return on future earnings.

The case contrasts immediate income with sustainable earning power. What risks arise when individuals prioritize short-term earnings over long-term skill and reputation building?

Prioritizing immediate earnings over long-term skill and reputation carries risks:

• Fragile income: Time sold cheaply may generate cash now, but lacks scalability or resilience in market changes.
• High replaceability: Skills not unique or highly demanded reduce negotiating power, leaving you vulnerable to layoffs or underpayment.
• Missed compounding: Long-term investments in learning, mastery, and reputation compound over time, multiplying future earning potential.

Solution: Balance short-term income needs with deliberate investments in skills, networks, and reputation to maximize the lifetime value of each hour sold.

If you were in Princess’s seat that night, what realization about your own use of time would challenge you most and what practical change would you commit to making to increase its value?

If in Princess’s seat, a challenging realization might be:

• Time is finite and valuable: Every hour sold cheaply today reduces long-term earning potential.
• Opportunity cost: Hours spent in low-value activities or unproductive roles are irrecoverable.

Practical changes to increase time value:

• Focus on mastery in a high-demand skill rather than spreading efforts thinly.
• Pursue continuous learning and certifications relevant to your career.
• Track how each role, project, or task contributes to increasing your hourly value.
• Set clear income or career goals and align daily actions with those goals.
• Build a strong professional reputation for reliability and excellence.

Outcome: Small, deliberate adjustments accumulate over time, turning each hour sold into higher financial and personal returns while preserving dignity and purpose.

The author is a Strategy, Leadership & Finance Enthusiast, an Mphil Finance graduate of the University of Ghana Business School, a member of the Institute of Chartered Accountants, Ghana, and a part-time lecturer at the UGBS.

Email: [email protected]

The post CASES IN FINANCE – Episode 15: Banking in 2026: “The Retail Banking Strategy” appeared first on The Business & Financial Times.

Read Full Story