Retail banking vs. corporate banking: how do they differ?

Nowadays, banking is a broad concept encompassing multiple types of services. Just take a look at the article where we described different types of financial institutions – definitely, the market is very diverse. By the way, in that particular article, the Genome team mentioned retail and commercial (corporate) banks, and we decided to elaborate on the topic a bit more.

Thus, today, we will explain the difference between retail and corporate banking and also describe some of the services that retail and corporate banks provide. 

What is a retail bank?

If you are looking for an account for your personal needs, a retail bank is as traditional as you can get when it comes to financial services. All because well-known and long-established banking institutions represent many retail banks. You likely encounter a couple of retail banks on your way to work even!

A retail bank (sometimes called a consumer bank) is a financial institution providing banking services and features to individuals. These are usually basic services that a client needs to navigate their day-to-day financial life. Thus, if you need more niche financial features, you may look into working with financial providers that cater to your specific demands. The retail banking services usually include:

• Checking, salary, and savings accounts;
• Personal debit, credit, and prepaid cards;
• Loans related to the individual’s life (e.i., car, home loans);
• Mortgages;
• Certificates of deposit;
• Insurance.

To start an account at a retail bank, a person will need to provide some documents to prove their identity and, sometimes, income levels. 

Although brick-and-mortar subsidiaries commonly represent retail banks, many of them also offer account opening options online – through the website or an app.

Сorporate banking: examples and meaning

Now that we established what retail banks are, let us explain more about corporate banking. As in the case of retail banks, the corporate ones are often well-known among the general public. But, there is an important distinction.

Corporate (aka commercial) banks cater their financial services and tools to businesses. Remember that these can be companies of any size – from startups to large corporations. 

The services of corporate banks often include:

• The opening of business banking accounts, such as current accounts (more on types of business accounts can be found here);
• The issuance of debit and credit cards for business;
• The management of funds and treasury;
• Loans and other credit products;
• Trade finance;
• Lending of equipment.

As mentioned, corporate banks are quite well-established. For instance, Citibank, JP Morgan, and HSBC provide corporate banking services. Interestingly, many financial institutions often offer both retail and corporate banking features. So, for instance, you can start a personal account inside your bank and then open a business one at the same institution! 

Opening a business banking account won’t be as easy as starting a personal one. You will need to provide information to prove your identity, as well as documents to confirm your company’s legitimacy, turnover, business structure, and more. Next, it is time to highlight the differences between commercial banking vs. retail banking.

Comparison: retail banking vs. corporate banking

After describing the main purposes of the two, let’s compare commercial vs. consumer banking. 

Points of comparison	Retail banking	Corporate banking
Clientele	Retail banks work with individuals.	Corporate banks work with small and medium-sized companies and enterprises.
Services the bank provides	Retail banks offer: checking, salary, savings, and other types of personal accounts; personal debit, credit, and prepaid cards; personal loans; mortgages; certificates of deposit; insurance.	Corporate banks offer: current and other types of business banking accounts; debit and credit cards for business; funds management; treasury management; business loans; credit products; trade finance; lending of equipment.
Account limits	Personal retail accounts normally allow clients to hold, send, and receive moderate amounts of funds.	Corporate banking users allow clients to store and transfer significantly larger sums of money, the transaction volume is also high.
Customer support	Clients usually communicate with the bank’s support team via basic communication channels (emails, messengers, social media).	In addition to regular customer support tools, clients can also be assigned account managers.
Fees	The fees for retail banking services are usually on the lower end.	The fees for corporate banking services are typically higher than for personal ones.

If you need a personal or business account, we recommend checking out Genome. You can start any type of account online – from the comfort of your home or office! For more information, visit our website.  

FAQ

What is the difference between corporate banking and retail banking?

The main difference when it comes to retail banking vs. corporate banking is that the former accepts applications from individuals, while corporate banks work with businesses of different sizes. Therefore, the services that retail and corporate banks provide also vary, as they cater to different clientele. Our team pointed out more differences between retail and corporate banking above. 

What is the difference between corporate banking and personal banking?

The difference between corporate and personal banking is the same as between corporate and retail banking, as personal and retail banking are synonymous.