Loading the player...

What is 'Retail Banking'

Retail banking, also known as consumer banking, is the typical mass-market banking in which individual customers use local branches of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs). In retail banking, the focus is on the individual consumer.

BREAKING DOWN 'Retail Banking'

Retail banking aims to be the one-stop shop for as many financial services as possible on behalf of individual retail clients. Consumers expect a range of basic services from retail banks, such as checking accounts, savings accounts, personal loans, lines of credit, mortgages, debit cards, credit cards and CDs. Most consumers utilize local branch banking services, which provide onsite customer service for all of a retail customer's banking needs. Through local branch locations, financial representatives provide customer service and financial advice. Financial representatives are also the lead contact for underwriting applications related to credit-approved products.

Expanded Services in Retail Banking

Banks are adding to their product offerings to provide a greater range of services for their retail clients. In addition to basic retail banking accounts and customer service from local branch financial representatives, banks are also adding teams of financial advisors with broadened product offerings, with investment services such as wealth management, brokerage accounts, private banking and retirement planning. Some of these ancillary services are also offered through outsourced third-party affiliations. All of the expanded offerings allow for increased convenience through greater connectivity of accounts, which helps customers to access funds and make personal transactions more quickly and easily.

Internet Finance and Retail Banking

In the 21st century, a movement towards internet finance banking operations has also broadly expanded the offerings for retail banking customers. Several online banks now provide banking services to customers purely through internet and mobile applications. These banks offer nearly all of the accounts and services provided by traditional banks, often with lower fees from reduced banking branch expenses. Examples of these banks include Simple, Moven and GoBank.

U.S. Banking Landscape Profile

In 2015, the top five largest U.S. commercial banks held over half of the industry's customer deposits. As of 2015, the top five largest commercial banks are JPMorgan, Bank of America, Wells Fargo, Citibank and U.S. Bank. In the banking industry, consumers also rely on the Federal Deposit Insurance Corporation (FDIC) to insure their bank deposits. As a leading U.S. government entity, the FDIC was responsible for insuring deposits at 6,638 banking institutions in 2014.

  1. Bank

    A bank is a financial institution licensed as a receiver of deposits. ...
  2. Branch Banking

    Branch banking is engaging in banking activities such as accepting ...
  3. Online Banking

    Online banking is the performance of banking activities via the ...
  4. Relationship Banking

    Relationship banking is a strategy used by banks to strengthen ...
  5. Foreign Branch Bank

    A foreign bank branch is a branch or an outpost of a larger, ...
  6. Bank Insurance

    Bank insurance is a guarantee by the Federal Deposit Insurance ...
Related Articles
  1. Personal Finance

    Retail Banking vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking refers to the aspect of banking that deals with corporate customers. Check out more on the differences between ...
  2. Personal Finance

    Banking Has Changed: What Does It Mean For Consumers?

    Banks have long been leading spenders on technological innovations. Learn the key changes in the banking industry and what institution is right for you.
  3. Insights

    The World's Top 10 Banks

    Learn more about the world's largest banks and how more financial power shifts eastward as China is home to four of the world's largest banks.
  4. Insights

    The Role of Commercial Banks in the Economy

    We interact with commercial banks daily to carry out simple financial tasks. That said, the function and creation of a commercial bank is anything but simple.
  5. Personal Finance

    Choose To Beat The Bank

    From internet banking to credit unions, it's in your power to cut fees and maximize service.
  6. Personal Finance

    Which Banks Pay the Highest Interest Rates on Savings Accounts?

    Online banks offer the best savings account interest rates. Not all banks offer the same features, so it pays to read the fine print.
  7. Investing

    Fidelity Investments Makes the Case for Banking at a Brokerage

    Forget banks – Fidelity offered up some reasons to conduct financial transactions at your brokerage.
  8. Investing

    Introduction To The Chinese Banking System

    As China steps into a greater role in the global economic system, their banking system continues to evolve.
  9. Personal Finance

    Online Banks: Lower Costs And Little Sacrifice

    For many, online banking has become a day-to-day routine. Still, there are some holdouts who refuse to accept the method.
  1. What are The Nine Major Financial Institutions?

    There are nine major types of financial institutions. Understand these major types of financial institutions that exist in ... Read Answer >>
  2. What developed countries have the highest concentration in the banking sector?

    Learn about the developed countries that have the greatest concentration in the banking sector and the most important emerging ... Read Answer >>
  3. How do interest rate changes affect the profitability of the banking sector?

    When interest rates rise, the profitability of the banking sector increases, and when rates fall, so do their profits. Read Answer >>
  4. What Distinguished Financial Services Sector from the Banks?

    Learn about the difference between the banking industry and the financial services sector and how to distinguish financial ... Read Answer >>
Trading Center