What is Corporate Banking? Definition of Corporate Banking, Corporate Banking Meaning and Concept
Corporate banking is the banking specialized in carrying out operations and managing business-related matters.
Corporate banking is also known as corporate banking or business banking. This is aimed at small and large companies, as well as multinationals and large corporations. Therefore, business banking tends to offer a more personalized treatment, since it is responsible for managing large business accounts.
Given that there is higher profitability and a movement of capital significantly higher than that of commercial banking, corporate banking is also usually related to investment banking and private banking. The latter are dedicated to the management of large assets.
Corporate banking has its own physical offices, like commercial banking. Although, sometimes, both are integrated within the same operations center (when they are two areas of the same financial firm).
The best-known corporate banking model is the American model. Banks like Morgan Stanley or JP Morgan are clear examples of corporate banking.
Sometimes it is also called transactional banking. This, due to the amount of operations and transactions that occur on a day-to-day basis.
What services does corporate banking offer?
Corporate banking focuses on responding to the day-to-day operational needs of companies, corporations and institutions, as well as their treasury management.
Therefore, it offers services that, for example, commercial banking does not.
Among the services offered by corporate banking, the following should be highlighted:
- Cash Management : Solutions for the management of the company's treasury.
- Trade Finance : Products focused on companies that trade abroad.
- Working Capital : Solutions focused on managing the liquidity of companies, as well as working capital in the short term.
- Securities Services : Financial asset management.
- Supply Chain Finance : Solutions focused on optimizing the working capital of companies.
- PSD2 : A system to make payments and operations in digital portals with security.
- Personal manager : A personal financial advisor for the management of communication between the client and the bank.
- Preferential treatment : They have preferential treatment to avoid queues and waiting times.
- Payment gateways and POS : Systems for the collection of goods or services through credit cards.
Requirements to be a corporate bank customer
The requirements that business banking requires to access the services it offers vary depending on the bank, as well as the country in which it is located. However, one of the main requirements is that customers who want to access have a capital exceeding, usually, $ 300,000.
However, there are corporate banks that offer their services to smaller companies. That is, companies that have fewer resources and that, even so, have business banking services.
In principle, corporate banking services are accessible to those who own a company and who need corporate banking to operate.