Corporate Banking vs Business Banking: Difference and Comparison

Banking is ubiquitous and essential in our day-to-day life. It helps us to manage our money and gives us loans when needed. Many banking types are unfamiliar to everyone; hence, they don’t know or are confused about them.

Corporate Banking and Business Banking are two types of banks most people are unaware of.

Key Takeaways

  1. Corporate banking provides financial services, such as loans, investments, and risk management, to large corporations and institutions with high transaction volumes and complex financial needs.
  2. Business banking offers basic financial services, such as checking and savings accounts, credit cards, and loans, to small and medium-sized enterprises (SMEs) with fewer financial needs.
  3. Corporate banking involves higher expertise, personalized services, and larger financial transactions, while business banking is more accessible, convenient, and affordable for SMEs.

Corporate Banking vs Business Banking

Corporate banking refers to banks’ services and products to large corporations and businesses. These services may include financing, investment banking, and cash management. Business banking refers to the services and products offered by banks to SMEs (Small to Medium Enterprises). These services may include checking and savings accounts, loans, and merchant services.

Corporate Banking vs Business Banking

Corporate Banking is a bank that provides banking services like credit management, cash management, asset management, and many other banking services just for big business companies. Its function is like a regular bank but at a large scale for big corporates.

Business Banking is a bank that an average individual can use to separate its finance from business finance. Its function is specially designed for small businesses and provides all banking and business needs to a business owner.

Comparison Table

Parameters of ComparisonCorporate BankingBusiness Banking
Definition It is a bank that deals with corporates and big businesses.It is a bank that deals with small businesses or their owners.
TransactionIt deals with huge transactions.It deals with relatively small transactions.
AuthorityA board of directors manages it.A single owner can manage it.
Function It provides services to big businesses and works for the need of corporates.It provides general banking services for small businesses.
Credit Rating It is opened under EIN and is part of corporations’ credit rating.It is opened under the SSN of the owner, and it is a part of his personal credit history.

What is Corporate Banking?

Corporate Banking is a Banking system that primarily provides services to corporations and big businesses.

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It provides services that big business corporates require to manage their extensive business, like managing cash, doing significant transactions, keeping a record of the daily unlimited transaction, etc.

It provides many services to corporations, including credit management, cash management, asset management, corporate finance, growth management, and loan management. These services need a lot sum of money to manage.

So it deals with a large sum of money as big businesses are involved with this bank.

Corporate banking is supposed to earn a lot of capital from loans. It gives loans to the business in a substantial amount that involves higher returns from the interest, and whatever service it provides, that service occurs on a large scale.

So profits earned by this bank are too high compared to other banks.

A corporation and big business open it. The account’s control is given to the board of directors or any group of members who act as the head of the company. So the decision of all banking functions is made by the members’ agreement.

Also, sometimes any member can do the banking individually on behalf of the organization.

corporate banking

What is Business Banking?

Business Banking is a banking system providing services to fulfil the business’s financial needs. Even a person running a small business needs to separate his bank statements and business financial needs. So for this, Business Banking is vital for any small business.

Business Banking provides many features. It helps with Withdrawals and Deposits, Standing orders and direct debits, Overdraft facility, Access to credit and debit cards, Telephone banking, Online banking, Mobile app, and Accounting tools.

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These services help in managing a business and tracking all things like expenses and taxes.

Any individual can open it to track their business finance, and it has the feature to control by any business employee. Business banking uses a fraud protection method; without this, it will be hard to track many transactions done by any person from one account.

It can be managed like a regular bank of an individual. It just helps keep an individual’s expenses separate from his business, which is good for business in the long run. It is because keeping track of business expenses and profits helps make decisions related to business very quickly.

Main Differences Between Corporate Banking and Business Banking

  1. The main difference between Corporate Banking and Business Banking is that Corporate Banking is for corporations and big businesses, but Business Banking is for small businesses.
  2. Corporate Banking is managed by a board of directors or a group of individuals, whereas any person can also use Business Banking to manage his business.
  3. Corporate Banking deals with substantial transactions. On the other hand, Business Banking deals with relatively small transactions.
  4. The service provided to Corporate Banking is specially made to manage large businesses. The benefits of Business Banking are the same as other banks, and some extra features to operate a business.
  5. Corporate Banking earns large profits as it deals with a massive sum, whereas Business Banking deals with relatively small gains.
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References
  1. https://www.emerald.com/insight/content/doi/10.1108/02652329210012122/full/html
  2. https://www.emerald.com/insight/content/doi/10.1108/02652329810241393/full/html

Last Updated : 11 June, 2023

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26 thoughts on “Corporate Banking vs Business Banking: Difference and Comparison”

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