Difference Between Retail Banking and Personal Banking (With Table)

Both retail banking and personal banking services are provided by banks to general public or individual or retail customers rather than corporate, businesses, institution, etc., and both are quite similar with each other on products and services because both offers approximately same or quite similar products and services.

Retail Banking vs Personal Banking

The difference between retail banking and personal baking is the category of customers served by them. 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 provided by banks and financial institutions to 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., to its retail customers.

Personal banking is one of the financial services provided by banks or financial institutions to its customer or general public rather than businesses, institutions, etc. In personal banking, banks offer internet banking, debit/credit card facilities, saving accounts, transaction facilities, NEFT, certificate of deposit, etc., to its customers that are consumers.

Comparison Table Between Retail banking and Personal Banking

Parameters of ComparisonRetail BankingPersonal Banking
MeaningIt is a financial service provided by banks to its consumers, and it is a part of the commercial banking systems.It is a financial service provided by banks to the general public other than corporate and businesses.
Product OffersMobile banking, RTGS, ATM, Recurring deposit account, Fixed deposit account, Credit Facilities, etc.Internet Banking, Credit/Debit card facilities, NEFT, certificate of deposit, banking transaction, saving account, etc.
TypesPostal 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
RoleThe role of retail banking is to provide various services to its retail customers, including managing money, deposit money, education loan, etc.The role of personal banking is to check and manage transactions, certificate of deposit, personal loan, etc.

What is Retail Banking?

Retail banking is also known as consumer banking. Retail banking is a financial service provided by banks and financial institutions to consumers. It is one of the parts of the commercial banking system that aim to provide banking services.

Retail banking is also important because it offers a much simple customer handling process than commercial banks, and it emerged as a good combination of a traditional and modern banking system that helps customers to solve their financial matters.

Products offered by retail banking are mobile banking, ATM, RTGS, recurring deposit account, credit facilities, etc., to its retail customers. The retail banking system is very important for local people because local people prefer local branches more.

Types of Retail Banks-

Functions :

  1. Improve liquidity and money supply
  2. Offers credit at an affordable interest rate
  3. Helps in reduction of defaults on a loan
  4. Recurring deposit account

Retail Banking Products and Services :

  1. Online banking
  2. Telephone banking
  3. Video banking
  4. Gift and travel card
  5. 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 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, certificate of deposit, etc., to its customers that are consumers.

Personal banking is also very important for the banking system because it provides some facilities which are not provided by the retail banking system.

Personal Banking Products and Services :

Personal Banking Products

  1. Bank accounts
  2. Call centre
  3. Cards

Personal Banking Solutions

  1. Debentures
  2. Tax saving FD
  3. Security deposits

Personal Banking Services

  1. Demat account
  2. Bonds
  3. Insurance products
  4. Loans or credit facilities

Types of a personal bank-

  1. Commercial banks
  2. Private banks
  3. Financial institution

Functions :

  1. Mortgage/credit facilities
  2. Provide full-fledged banking facilities on hand
  3. Internet banking and personal banking facilities

Main Differences Between Retail Banking and Personal Banking

  1. Retail banks offer different products and services to their retail customer. Personal banking is provided to the general public or consumers, or individuals for its personal use.
  2. Retail banking offers mobile banking, ATM, RTGS, recurring deposit account, credit facilities, etc., and personal banking. Banks offer internet banking, debit/credit card facilities, saving account, transaction facilities, NEFT, certificate of deposit, etc.
  3. 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.
  4. Retail banking play function like control liquidity and supply of money, Offers credit at the affordable interest rate, etc. and personal banking play functions like credit facilities, provide full-fledged banking facilities on hand, etc.
  5.  Retail banking play role to manage money, deposit money, education loan, etc., to its retail customers and personal banking play role to checking and manage transactions, certificate of deposit, mortgages, personal loan, etc., to individual.

Conclusion

The above discussion is just an introduction of products and services offered by retail banking and personal banking. As per the above discussion, we can say that both have similar or quite different on many functions. Both have a wide range of varieties in their product and services.

Banking products and services are changing drastically due to the up-gradation of technology, and both retail and personal banking play an important role to fulfil customer needs, increase productivity and economic development.

So, both are important for a good banking system.

References

  1. https://www.emerald.com/insight/content/doi/10.1108/02652320210432936/full/ht
  2. https://link.springer.com/article/10.1057/palgrave.jt.5740049

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