For example, there are many occasions when a company with multiple locations needs a wholesale banking solution for cash management. Technology companies with offices are a prime candidate for these services. Let`s say a software-as-a-service (SaaS) company has 10 sales offices in the United States, and each of its 50 sales reps has access to a corporate credit card. The owners of the SaaS company also require each sales office to hold $1 million in cash reserves, for a total of $10 million across the company. It`s easy to see that a company with this profile is too big for standard retail banking. “Wholesale” services are reserved only for government agencies, pension funds, financially sound companies and other institutional clients of a similar nature. This is for businesses that need more services than a sole proprietorship or small business, and need them on a large scale. Due to the wide reach, the prices offered for these services are generally lower than what is offered to an individual. Wholesale banking refers to banking services sold to large customers such as other banks, other financial institutions, government agencies, large corporations and real estate developers. This is the opposite of retail banking, which focuses on individual customers and small businesses. Wholesale banking includes, but is not limited to, currency conversion, working capital financing, significant business transactions, mergers and acquisitions, advisory and underwriting. The simplest way to conceptualize wholesale banking is to think of it as a discount supermarket like Costco, trading in such large quantities that it can offer special prices or reduced fees per dollar. It is advantageous for large organizations or institutions with a high proportion of assets or business transactions to engage in wholesale banking rather than retail banking.
Instead, business owners can hire a bank and apply for a business facility that holds all of the company`s financial accounts. Wholesale banking acts as a facility that offers discounts if a company meets the minimum cash reserve requirements and minimum monthly transaction requirements, which the SaaS company will meet. Wholesale banking also refers to borrowing and lending between institutional banks. This type of loan takes place on the interbank market and often involves extremely large sums of money. Essentially, wholesale banking is the financial practice of lending and borrowing between two large institutions. The types of services are offered by investment banks, which often also offer retail banking services. This means that a person seeking wholesale banking would not have to go to a special institution and could instead engage the same bank in which they conduct their personal retail banking. Please note that the vocabulary of the vocabulary list is only available in this browser.
As soon as they have been transferred to the vocabulary trainer, they are also available on other devices. Wholesale banking refers to banks` activities with corporate clients. It includes services for large corporations, medium-sized companies, real estate companies and investors, in the area of trade finance, institutional clients (e.g. pension funds, corporations, etc.), other banks and financial companies. Amanda Bellucco-Chatham is an editor, writer and fact-checker with years of experience researching topics related to personal finance. Specialties include general financial planning, career development, loans, retirement, tax preparation and credit. It is therefore advantageous for the company to engage in a business facility that consolidates all its financial accounts and reduces its costs, rather than keeping 10 retail chequing accounts and 50 retail credit cards open. Do you want to add a word, phrase or translation? How can I transfer translations to the vocabulary trainer? From a general perspective, wholesale banking primarily includes transactions in wider volume ranges. Institutions active in this field specialize in the following areas of activity, among others: • Financing • Risk assumptions • Market making • Consulting • Mergers and acquisitions • Investment management unlike retail banking (retail banking) Generally voluminous banking activities with legal entities (client companies), in particular with industrial and commercial companies as well as with financial institutions. Term for wholesale business, also business of corporate customers. As a rule, these are high-volume banking transactions with legal entities, in particular with industrial and commercial companies as well as with financial institutions.
also private banking, retail banking.