Retail banking refers to the division of a bank that deals directly with retail customers. Also known as consumer banking or personal banking, retail banking is the visible face of banking to the general public, with bank branches located in abundance in most major cities. Banks that focus purely on retail clientele are relatively few, and most retail banking is conducted by separate divisions of banks, large and small. Customer deposits garnered by retail banking represent an extremely important source of funding for most banks.
Corporate
banking, also known as business banking, refers to the aspect of banking
that deals with corporate customers. The term was originally used in the U.S.
to distinguish it from investment
banking, after the Glass-Steagall Act of
1933 separated the two activities. While the Act was repealed in the 1990s,
corporate banking and investment banking services have been offered for many
years under the same umbrella by most banks in the U.S. and elsewhere.
Corporate banking is a key profit center for most banks; however, as the
biggest originator of customer loans, it is also the source of regular
write-downs for loans that have soured.