Private banking began in the 18th century. Nowadays, private banking offers are to be found both in private banks, specialized in this area, and in universal and investment banks. It is worth mentioning that the first private bank was established in St. Gallen, Switzerland, in 1740, by Caspar Zyli.

Experts define private banking as an individualised and comprehensive system of financial services provided by a bank to wealthy individuals. The author of the article identifies it as a correct bank service to a customer. It is of secondary importance that this type of services is addressed only to the wealthiest customers. The attempt to specify who is considered a wealthy customer is pointless since it depends, firstly, on the bank, secondly, on the country and thirdly, on the customer's occupation and social status. Private banking offers may also be addressed to the customers who do not meet financial conditions but have the appropriate social status, e.g. politicians, lawyers, doctors or actors.

The development of private banking is impressive. Branches of banks offering (or at least trying to offer) such a refined product can be easily found all over the world. However, a lot remains just an attempt since private banking belongs to this segment of services where the development of the appropriate product is not enough. The product has to be delivered by an excellent bank employee, a well-educated person with perfect manners, a person who will sometimes be an example to follow for the potential customer.

The article aims to present a significant role of private banking in contemporary banking, focusing on the current situation and prospective development directions of the sector.

The author used private banking model to depict problems of consolidation and competition in the financial services sector, as well as the differentiation of entities that develop and distribute products. He also highlighted a trend to change the model of product offering by market participants, including private outsourcing which is more and more frequently used in private banking.

The article also aims to emphasize that management strategies (including the following three: leading product, brand identification and service quality) play a crucial role in private banking.