Corporate banking is the part of the banking sectors that serves business or corporate customers, whereas retail banking refer to a bank's services that deal directly with consumers. So here this article gives the difference between Corporates banking and retail banking to better understand about this topic.
What is Corporate Banking?
Large corporations and small and medium sized businesses(SMEs) are among the corporate's clients that can take use of the corporates banking, which is a particular king of banking service. In order to meet the demands of corporate clients, corporate's banking services offer treasury services, cash management, working capital finance, trade finance, and other financial products. Relationship managers and other specialized teams are typically used to provide corporates banking services.
What is Retail Banking?
Individual clients are the target market for retail baking services. Personal loans, mortgages credit cards, savings and checking accounts and other financial products are all part of retail banking services. Online, mobile and bank branch locations are typically the ways that retails baking services are provided.
Corporate Banking Vs Retail Banking | Difference between Corporates and Retail banking
Target Audience:
Corporate banking focuses on business and corporations as customers, Retail banking focus on employees and self employed people as customers.
Fund management:
Corporate bank is high value transactions, while retail bank is low value transactions.
Customer Relationships:
Corporate bank arranges team of financial experts to handle the personal relationship with the corporate client for growth enhancement. Retail bank customers can reach out to the branch and get access to the best schemes and plans.
Loans
Corporate bank can offer a loan of more than Rs. 5 Cr+, Retail bank can offer loan upto Rs. 5 Cr.
Deposit:
Corporates deposits are usually larger and less frequent, but the retail deposits are usually smaller and more frequent.
Product:
Corporate banking services are focused on the need of businesses, Where's the customers are the focus of retail banking products.
Processing cost:
In corporates banking processing cost is comparatively high. In retail banking processing cost is relatively low.
Risk:
Corporate banking is generally considered to be risker, whereas retail banking is generally considered to be less risky.
Revenue:
Retail banking generate revenue through fees and interest charged on loans and deposits, whereas corporates banking generate revenue through fees and interest charged on loans and other financial products.
Transaction:
In corporates banking high value of transaction, In retail banking low value of transaction.
Service:
Corporate bank usually offered through relationship managers and other specialized teams, while Retail banking usually offered through bank branches, online banking and mobile banking.
Contributes:
Corporates banking contributes to business growth, financial stability, and access to capital for corporations and larger enterprises, but the retail banking contributes to personal financial stability, wealth accumulation and access to credit for individual and small business.
Branch:
Corporates banks may have more focused branch network and dedicated relationship managers to serve corporates clients, on the other hand retail bank often have wider network of branches to serve retail customers.
Clientele:
The customer of corporate banking is rather limited, while the clientele of retail banking is extensive.
Service:
Corporates bank may provide financial analysis, risk management advice, and strategic financial planning services to corporate's clients, while the retail banks may provide basic financial education and guidance to individual customers.
Customers:
Corporates banking customers are typically medium sized enterprises, large corporations or multinational companies, Retail banking customers are typically individual, families or small businesses.