Bank management: retail, wholesale, investment banks.

Bank management: retail, wholesale, investment banks.
What is corporate banking?
Wholesale banking refers to banking services sold to large customers, such as other banks, other financial institutions, government agencies, large corporations, and real estate developers. It is the opposite of retail banking, which focuses on individual clients and small businesses. Wholesale banking services include currency conversion, working capital financing, large business transactions, mergers and acquisitions, advisory, and underwriting, among other services.

Main socket
Wholesale banking refers to banking services sold to large customers, such as corporations, other banks, and government agencies.
Typical services sold are mergers and acquisitions, advisory, currency exchange and underwriting.
Wholesale banking is the opposite of retail banking, which serves individuals and small businesses.
Most standard banks offer wholesale banking services in addition to traditional retail banking.
Wholesale banking also refers to the borrowing and lending between institutional banks.

Understanding Corporate Banking
In essence, wholesale banking is the financial practice of lending and borrowing between two large institutions. The types of services are provided by investment banks that often also provide retail banking services. This means that an individual who is looking for wholesale banking services will not have to go to a private institution, and can instead deal with the same bank in which they operate personal retail banking.
Services considered as “Joomla” are reserved only for government agencies, pension funds, well-funded corporations and other institutional clients of a similar nature. It is intended for entities that require the service of more than one individual or a small business, which needs it on a large scale. Because of the large volume, the prices offered for these services are usually lower than what is offered to the individual.
Wholesale banking also refers to the borrowing and lending between institutional banks. This type of lending takes place in the interbank market and often involves very large amounts of money.

Example of corporate banking
The easiest way to visualize wholesale banking is to think of it as a big discount store, like Costco, that handles so much that it can offer special rates or discounted fees, on a dollar basis. It becomes advantageous for large institutions or institutions with large amount of assets or business transactions to engage in wholesale banking rather than retail banking.
For example, there are many occasions when a company with multiple locations needs a wholesale banking solution for cash management. Technology companies with affiliate offices are prime candidates for these services. Let’s say a SaaS (Software as a Service) company has 10 sales offices spread across the United States, and each of the 50 sales team members have access to the company’s credit card. SaaS owners also require that each sales office maintain $1 million in cash reserves, totaling $10 million across the company. It’s easy to see that a company with this profile is too big for retail banking.
Alternatively, business owners can do business with a bank and request a company facility that maintains all of the company’s financial accounts. Corporate banking works like a facility that offers discounts if the company meets the minimum cash reserve requirement and minimum monthly transaction requirement, both of which will hit the SaaS company.
Thus, it is more beneficial for a company to enter into a corporate facility that consolidates all of its financial accounts and lowers its fees, rather than keeping 10 retail checking accounts and 50 retail credit cards open.

How do investment banks and retail banks work
The investment bank’s income comes from selling corporate and government securities to investment institutions. Investment banks also earn revenue by advising companies regarding mergers, acquisitions, and initial public offerings (IPOs). The retail bank serves individual consumers by providing checking accounts, loan services, and other personal financial services.
For cost reasons, retail banks and commercial banks are increasingly serving customers through online services or mobile apps while reducing the number of physical branches they operate.
retail banks
Retail banks mainly focus on retail banking. For example, providing checking account services, accepting deposits, providing loans to individual clients. Retail banks also offer additional services such as safe deposit boxes and automatic payment services. This is often referred to as personal banking, consumer banking, or retail banking.
Customers in the local market are usually served via a branch or an ATM, and the typical customers are individuals, families, and small businesses. Deposit activities include checking accounts, savings accounts, and certificates of deposit. Lending focuses on personal credit (such as credit cards and personal lines of credit), mortgages, auto loans, and other financing for large consumer purchases.
Retail banks make money by charging fees (for checking accounts, credit and debit cards, and other services) and interest income from customers’ loans. For retail banks, key performance drivers typically include deposit growth and geographical coverage. Banks are taking advantage of technology to grow their customer base.
investment banks
Investment banking is a subset of commercial or corporate banking that focuses on institutional clients rather than individuals. Investment banks serve the capital market needs of companies and institutions as well as provide advisory services.
When the company needs to attract additional capital by issuing debt or shares, the investment banks guarantee the guarantee issued on behalf of the institution seeking the capital. Investment banks also provide advisory services to clients regarding capital market conditions and trends, mergers and acquisitions (M&As), and corporate finance.
Investment banks primarily make money through fee income that is negotiated as part of a capital markets transaction. The main performance drivers for investment banks are market competition for fee income, presence and reputation in the capital markets, and the frequency, size and scope of transactions.