Wholesale banking provides financial services to corporations, businesses, and government entities at discounted rates, including investment consultation and support services. It differs from retail banking, which focuses on individual consumers. Many banks engage in both types of banking.
Wholesale banking is commonly defined as banking services that are provided between commercial banks and other types of financial institutions. However, the term is often used to refer to the wide range of financial services provided by financial institutions to various corporations and businesses, as well as government entities. Wholesale banking is different from retail banking because it focuses more on corporate-style entities and high-value transactions, and retail banking focuses on providing financial services to individual consumers. Many banks tend to engage in wholesale and retail banking.
The task of providing a wide range of services to large corporations, midsize businesses, and small businesses is part of wholesale banking. Often a financial institution will provide these services at discounted rates based on the number of services included in the package. This approach makes it more attractive for a company to place all financial matters with a single institution instead of using different banks and agencies for each banking service the company needs to function.
This type of banking is also an open option for real estate developers, market investors and other companies that operate in the buying and selling of properties and other forms of investment. The advantage of wholesale banking in this app is the easy access to the total financial portfolio, which makes transfers between accounts much simpler. It also includes features that enable efficient transfers of ownership of shares, funds, and other financial instruments between financial institutions.
The scope of wholesale banking packages that extend to businesses and government entities can also include a range of other financial services. Discounted interest rates are commonly included as part of the incentive to enter into a wholesale financing agreement. Many valuable support services, such as investment consultation, help with merger or acquisition details, and various subscription services, are often included with wholesale banking support.
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