Banks provide retail banking and personal banking services to the general public or individual or retail customers rather than corporate, businesses, institutions, etc., and both are pretty similar in products and services because both offer approximately the same or quite similar products and services.
Key Takeaways
- Retail banking involves offering banking services to individuals and small businesses, while personal banking focuses on personalized services to meet the financial needs of individual customers.
- Retail banking includes basic services such as savings and checking accounts, loans, and credit cards, while personal banking may include more specialized services like wealth management and investment advice.
- The primary focus of retail banking is on generating revenue through a large number of customers. In contrast, personal banking is focused on building long-term relationships with high-net-worth individuals.
Retail Banking vs Personal Banking
In retail banking, facilities are provided to retail customers, and on the other hand, personal banking services are provided to the general public or individuals rather than businesses, corporate, etc.
Retail banking is also known as consumer banking. Retail banking is a financial service banks, and financial institutions provide consumers. It is one of the categories of the commercial banking system that aim to provide banking services.
A wide range of products is offered by retail banking to its retail customers. These products include mobile banking, ATM, RTGS, RD account, etc., for its retail customers.
Personal banking is one of the financial services provided by banks or financial institutions to its customer or the general public rather than businesses, institutions, etc.
In personal banking, banks offer internet banking, debit/credit card facilities, saving accounts, transaction facilities, NEFT, certificates of deposit, etc., to their consumers.
Comparison Table
| Parameters of Comparison | Retail Banking | Personal Banking |
|---|---|---|
| Meaning | It is a financial service provided by banks to its consumers and part of the commercial banking systems. | It is a financial service banks provide to the general public other than corporate and businesses. |
| Product Offers | Mobile banking, RTGS, ATM, Recurring deposit account, Fixed deposit account, Credit Facilities, etc. | Internet Banking, Credit/Debit card facilities, NEFT, certificate of deposit, banking transactions, saving account, etc. |
| Types | Postal banking services Private banks Financial Institutions Community development banks | Commercial banks Private Banks Financial Institutions |
| Functions | – Improve Liquidity and money supply – Offers credit at an affordable interest rate | – Mortgage or credit facilities – Provide full-fledged banking facilities on hand |
| Role | The role of retail banking is to provide various services to its customers, including managing money, depositing money, education loan, etc. | The role of personal banking is to check and manage transactions, certificates of deposits, personal loans, etc. |
What is Retail Banking?
Retail banking is also known as consumer banking. Retail banking is a financial service banks, and financial institutions provide consumers. It is one of the parts of the commercial banking system that aim to provide banking services.
Retail banking is also essential because it offers a more straightforward customer-handling process than commercial banks. It emerged as a good combination of a traditional and modern banking system that helps customers solve their financial matters.
Retail banking offers mobile banking, ATM, RTGS, recurring deposit account, credit facilities, etc., to its retail customers. The retail banking system is vital for local people because local people prefer local branches more.
Types of Retail Banks-
Functions :
- Improve liquidity and money supply
- Offers credit at an affordable interest rate
- It helps in the reduction of defaults on a loan
- Recurring deposit account
Retail Banking Products and Services :
- Online banking
- Telephone banking
- Video banking
- Gift and travel card
- Personal loan and gold loan
What is Personal Banking?
Personal banking is one of the financial services provided by banks or financial institutions to its customer or the general public or individuals rather than businesses, institutions, etc., and individuals include students, retirees, adults, etc.
In personal banking, banks offer internet banking, debit/credit card facilities, saving accounts, transaction facilities, NEFT, certificates of deposit, etc., to their consumers.
Personal banking is also essential for the banking system because it provides some facilities not offered by the retail banking system.
Personal Banking Products and Services :
Personal Banking Products
- Bank accounts
- Call centre
- Cards
Personal Banking Solutions
- Debentures
- Tax saving FD
- Security deposits
Personal Banking Services
- Demat account
- Bonds
- Insurance products
- Loans or credit facilities
Types of a personal bank-
- Commercial banks
- Private banks
- Financial institution
Functions :
- Mortgage/credit facilities
- Provide full-fledged banking facilities on hand
- Internet banking and personal banking facilities
Main Differences Between Retail Banking and Personal Banking
- Retail banks offer different products and services to their retail customer. Personal banking is provided to the general public, consumers, or individuals for personal use.
- Retail banking offers mobile banking, ATM, RTGS, recurring deposit accounts, credit facilities, and personal banking. Banks provide internet banking, debit/credit card facilities, saving accounts, transaction facilities, NEFT, certificates of deposit, etc.
- Retail banks are of different kinds, i.e. postal banking services, private banks, community development banks, etc., and personal banks are also many types, i.e. commercial banks, financial institutions, private banks, etc.
- Retail banking play functions like controlling liquidity and supply of money, Offering credit at an affordable interest rate, etc. and personal banking play functions like credit facilities, providing full-fledged banking facilities on hand, etc.
- Retail banking plays a role in managing money, depositing money, education loan, etc., to its retail customers. Personal banking plays a role in checking and managing transactions, certificates of deposits, mortgages, personal loans, etc., to individuals.
- https://www.emerald.com/insight/content/doi/10.1108/02652320210432936/full/ht
- https://link.springer.com/article/10.1057/palgrave.jt.5740049
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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