We all know banks as financial institutions that provide financial solutions we need. However, besides serving as financial institutions for the general public, banks also provide banking services for companies.
The services provided by banks to companies are certainly different from those provided to the general public. Services for companies are known as corporate banking.
In this article, we will discuss corporate banking and its benefits for companies. Read this article to learn more.
Key Takeaways:
- The services provided by banks to companies are certainly different from those provided to the general public.
- Corporate banking is a type of financial service specifically aimed at large companies or businesses to help them overcome various financial challenges and expand their business.
- Besides corporate services, banks also provide retail banking services, which are banking services for the general public.
What is Corporate Banking?
According to Investbro (2024), corporate banking is a type of financial service specifically aimed at large companies or business people to help them through various financial solutions and expand their business.
Corporate banking services are provided for large-scale companies that have thousands of employees, as well as strong and complex financial structures. These companies are often already listed on the stock exchange, so the financial services they need are more complex.
Differences Between Corporate Banking and Retail Banking
As mentioned above, corporate banking is a service that banks provide for companies. Besides corporate services, banks also provide retail banking services, which are banking services for the general public.
So, what are the differences between the two? Below are the differences between corporate banking and retail banking.
Target Consumers
Corporate banking targets consumers from the corporate sector, especially large companies. Meanwhile, retail banking targets consumers from the general public.
Products and Services Offered
The products offered by corporate banking are also different from retail banking. Call deposits or Letter of Credit (LoC) are some examples of services offered by corporate banking.
On the other hand, retail banking also offers special products for the public that are not offered to companies. For example, remittance services.
Transaction Fees
Retail banking generally charges smaller transaction fees compared to corporate banking. Banks compensate for this cost by increasing the number of retail customers.
In addition, companies can also negotiate transaction fees offered by banks to retain corporate customers.
Transaction Volume
Banks generally increase revenue by increasing the number of retail customers who use their services. This makes retail banking have a larger transaction volume than corporate banking.
Loan Amount
Both retail banking and corporate banking require credit scoring to ensure customers' ability to repay loans. However, banks generally provide smaller loan amounts to retail customers.
This happens for two reasons. One is that retail customers' needs are smaller than corporate customers. Corporate customers often use loans from financial institutions to finance projects. Additionally, there is more guaranteed potential for revenue increase in corporate customers.
7 Services and Products of Corporate Banking
There are at least 7 services and products offered by corporate banking, including:
Storage Services
Through corporate banking, banks provide certain storage services for companies. For example, call deposits or deposits that can be withdrawn only within 1 day or 1 week, which are only provided for corporate customers.
Loan Services
Companies can also use loan services provided by banks. These loan services can be in the form of loans to build factories, develop projects, and others.
Financial and Cash Management Services
In addition, banks also provide financial and cash management services so companies can manage their cash and liquidity.
Treasury Management Services
Besides managing cash, corporate banking also enables companies to conduct treasury management, which is the activity of managing the company's financial resources. This activity is carried out to achieve the company's financial targets, including mitigating financial, operational, and reputational risks.
Trade Financing
Banks provide trade financing services that companies can use to finance their trading operations. For example, this service can issue a letter of credit (LoC) for banks to advance company funds when companies want to conduct international trade.
Employment Services
Corporate banking services can also be used to conduct employment-related activities, such as salary distribution, deductions for pension funds, and others.
Commercial Real Estate
Financial institutions through this service also offer services related to company asset analysis, such as company asset valuation.
Easy Company Transactions with balé bisnis
That's the information about corporate banking that we can share. It's important for business people to use corporate banking services to overcome various financial problems they face.
To meet business or company needs, BTN provides balé bisnis solutions. This internet-based banking service allows institutional customers (non-individual) to manage their finances well.
Through this service, companies can obtain information about their accounts, manage company cash flow, and conduct online real-time transactions without place and time limitations that are easy and safe.
Interested in learning more about the transaction convenience that BTN can provide for companies? Click this link to learn more about the services offered by BTN.
