Retail Banking versus Corporate Banking

There are different types of banking process that caters to different types of consumers. The banking process like retail banking, corporate banking and private banking that caters to different consumers for different purposes. Let’s compare retail or personal banking with corporate banking services and check out the difference.

Definition:

Retail banking or personal banking refers to the bank that deals directly with retail customers. This is the form of banking individuals see on a everyday basis, with bank branches situated all around the city, country or even globally. Corporate banking or business banking is the type of banking that deals exclusively with corporate customers and is used at a wholesale level, and is one of the biggest originators of customer loans. This also happens to be a profitable key market for most banking institutions.

Customers

Retail banking focuses mainly on individuals. Most of the retail banking is conducted by bank divisions or branch offices that deal with such clients directly. The deposits by these customers in retail banking are an important source of funding that the banks. Corporate banking depends on a diverse range of clients’ right from small to middle sized businessmen to large corporate companies. These clients invest a few millions incorporate banking and thus provide a large funding for banks.

Products

Retail banking offers various different products to its customers. It includes, checking, saving and fixed deposit accounts where customers can invest and get high returns with the interest rates on the investments. These investments are a funding source for banks as they are invested for certain period of time. Corporate banking involves provisions of high loans and credit products which cater to the high end needs or corporate customers. It also includes customized loans and leases for a range of equipment used by companies which specialize in manufacturing, transportation and information technology.

Services

Customers of retail banking are offered the services of using banking cards that are tied up with the banks to utilize funds of your own, or a line of credit from the bank. The other services that are included in retail banking are services of stock brokerage, provision of insurance, net banking, SMS banking, phone banking, etc. corporate banking offers the services of treasury and cash management services that are used by companies to manage their working capital and requirements for currency conversion. They also offer services that are related to commercial real estate such as asset analysis, evaluation of portfolio and debt and equity structuring. They also provide letters of credit, bill collection and factoring for trade finance.

Neha Sharma is a finance student who loves to write about corporate banking. She is delighted to offer the basic understanding of corporate banking in simple language and expand the awareness about this banking product.