Both retail banking and consumer banking are services provide to their customers with some additional facilities for their customers to keep their money safe in banks.
Key Takeaways
- Retail banking refers to banking services provided to individual customers, while consumer banking refers to banking services provided to consumers, which may include individuals or businesses.
- Retail banking focuses on deposit and withdrawal services, while consumer banking includes a wider range of services such as loans, credit cards, and investment products.
- Retail banking is provided through physical branches, while consumer banking may be provided through physical branches, online, and mobile channels.
Retail Banking vs. Consumer Banking
Retail banking is a type of banking in which services are given to the customers. Businesses are not involved in retail banking. Retail banking focuses mainly on money deposit and withdrawal. Retail banking is also called private banking. In consumer banking, banking services are given to both customers and businesses. Loans are also provided in consumer banking. It also provides investment services.
Retail banking is also known as private banking, where people of high net worth and income have the facility to make their accounts in them.
Consumer banking is also known as personal banking, where people with a commonwealth and salary can make an account in such banks.
Comparison Table
| Parameters of Comparison | Retail Banking | Consumer Banking |
|---|---|---|
| Meaning | It helps provide services and products to its retail customers to increase their business. | It is a financial institution that provides Facilities and services to customers having a minimum income. |
| Services provided | They provide services such as ATMs, having an RD account, access to business loans, etc. | They provide services related to giving debit and credit cards and access to NEFT banking. |
| Another name | The other name for Retail banking is Private Banking. | The other name for consumer banking is Personal Banking. |
| Customer type | Customers of a Retail bank are people with a high net-worth | Customers in consumer banking are traditionally people with standard savings accounts. |
| Main function | They help in the improvement and liquidity of the money of an individual or an entity. | They help their customers to get loans and other card and online banking facilities. |
What is Retail Banking?
Retail banking is also known as private banking, where people of high net worth and income can make their accounts in them.
Retail banking offers access to an ATM card, mobile banking, RD account, etc. Retail banking is said to be a form of commercial banking that focuses on giving services to its customers.
Local people prefer retail banking more as they are more into business. Hence, retail banking is very efficient for the growth of the business of local people. Retail banks help in increasing liquidity and money supply.
What is Consumer Banking?
Consumer banking is also known as personal banking, where people with a commonwealth and salary can make an account in such banks.
In consumer banking, the banks provide access to internet banking, debit card, initiating a credit card balance, access to a feature of NEFT, etc.
The primary function performed in consumer banking is providing facilities on credit to a consumer banking customer.
Main Differences Between Retail Banking and Consumer Banking
- Customers in retail banking include individuals of high net worth, institutions, businesses, etc. On the other hand, customers in consumer banking have individuals with regular savings accounts, retired individuals, students, etc.
- The primary function that a retail bank performs is that they improve the supply and liquidity of money to increase the business of their customers. On the other hand, the primary function performed by a consumer bank is that it helps provide loans on a credit basis for their customers.
- https://www.sciencedirect.com/science/article/pii/S0378720601000970
- https://onlinelibrary.wiley.com/doi/abs/10.1002/cb.46
Last Updated : 11 June, 2023
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
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