-> retail banking
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- Retail banking is a type of banking with which financial transactions are executed with clients instead of other banks and corporations. Products and services provided include credit and debit cards, transactional and savings accounts, personal loans, mortgages, and many others. Retail banking is designed as a one-stop location for a number of financial products and services. Some retail banks even offer various investment services, including brokerage accounts, wealth management, retirement planning, and more. Some banks also have commercial and merchant branches that cater to businesses.
The most basic products offered by retail banks include transactional and savings accounts. However, retail banks aim to offer a large array of products to attract customers and maintain customer loyalty. This diversification offers more opportunities for financial institutions to profit.
In addition to basic services, banking establishments offer retirement accounts, certificates of deposit, car and home loans, safe deposit boxes, and others. Banks offer some or all of these services depending on the financial and banking regulations. However, they often partner with other banks and financial entities to offer more services. It can be safely said that retail banks aim to offer customers financial products and services for life, from college loans to retirement accounts and trusts.
It should be noted that retail banking is a very competitive field. With so many persons requiring retail banking products, many are shopping around to find the most lucrative offers, as well as the best rates, incentives, rewards plans, and deals. Retail banks compete by offering perks (e.g. credit monitoring, travel credit cards), low interest rates, and other services aiming to attract new customers. Many retail banks offer incentives such as balance transfer credit cards which allow clients to transfer balances to credit card accounts at their bank.
Some banking establishments are, in fact, international corporations with many offices and branches. Other retail banks only have national presence. Some of them may be single-branch banks or they may operate regionally. Community banks, for example, may provide products and services intended to meet the needs and requirements of community members. These may include home or business loans, mortgages, and other financial products. In fact, community banks often offer better interest rates than the big banks. Community development banks are one type of banks in the United States that work to boost economic development and growth in moderate- and low-income communities and geographic areas. They aim to serve the members of these communities and are certified by the US Community Development Financial Fund. To become certified, community development banks should have as their main goal community development. These banks offer a variety of retail banking services to customers in economically underdeveloped areas.
Postal savings banks are another type of retail banks run by postal savings systems. Their mission is to offer clients a convenient and save way to save money. In the USA, the Postal Savings System operated between 1911 and 1967, offering depositors annual interest of 2 percent.
Private banks are another distinct type of retail bank, which are owned by general or individual partners. Only a few such banks operate in the United States, such as Brown Brothers Harriman & Co. Brown Brothers operates through 3 businesses – commercial banking, wealth management, and investment banking. These businesses serve high net worth clients and corporate institutions. Savings banks also function as retail banks that accept savings deposits. They offer a variety of products and services, among which insurances and credit, savings products, and payments. These are available to medium-sized and small enterprises and individuals. In the US, for example, savings and loan associations accept deposits and offer different loans and mortgages.