An Insight into the Distinction between Retail Banking and Corporate Banking
What is Retail Banking?
It is referred to a segment of a bank that directly deals with the retail customers. It is also known by the terms like consumer banking or personal banking. Retail banking is a way that directly faces the banking aspects to the general public with its bank branches dispersed in most of the major cities. Banks that purely centralizes on retail clientele are only left a handful, and most of the retail banks are controlled by separate bank divisions, no matter how large or small. Customer deposits that are garnered by retail banking act as a representative of a significant source of funding for most of the banks.
What is corporate banking?
Corporate banking is also referred to as business banking that deals directly with the corporate customers. The term was primarily used in the United States to differentiate it from the investment banking. This was after when the Glass-Steagall Act of 1933 separated these activities as two different activities. The law was repealed in the year 1990s. Both investment banking services and corporate banking services have been provided for many years under the same umbrella by almost every bank in the United States and other countries as well. Corporate banking is deemed as the key profit center for most of the banks. But as it is the largest source of customer loans, it is also a rich source of write-downs on a regular basis for loans that are being subjected to sour.
Products and Services Offered by Retail Banking
- Checking and savings accounts
The customers have to pay a monthly fee when it comes to checking accounts. And when speaking of savings account, they provide higher interest rates than checking accounts however, usually cannot have checks written on them.
- Certificate of deposits of CDs
They are guaranteed investment certificates. They are deemed as the most famous investments among the conservative investors and are considered a crucial funding source for banks as the funds are available to them with the help of the CDs for a defined period of time.
- Automobile financing
Banks provide loans on both new and the used vehicles. It also provides refinancing services for current car loans as well.
Products and Services Offered by Corporate Banking
- Loans and other credit options
This is the most famous are of business within corporate banking. It is also one of the largest sources of profit and risk for a bank.
- Treasury and cash management services
These services are utilized by firms for the management of their working capital and currency conversion requirements.
- Commercial real estate
Services provided by the bank encompass debt and equity structuring, portfolio evaluation, and real asset analysis.
- Employer services
They include services like payroll and group retirement plans. They are provided by the particular affiliates of a bank.
For similar insights and enjoy the services of either of the banking activities, visit Blackhawk Bank – Rockford Banking Center.