Business Banking refers to company’s dealing with its finances at an institution that offers various types of services to their customers such as loans, credit and savings etc. It is also known as corporate banking which refers to banking that deals with corporate customers. A bank earns more profit from business banking. It provides various services at large extent. Services include cash management, customizing loans, asset management, treasury services and more. There are so many products and services which covered in business banking. But below are some important products which explained as below:
- Financing & Lending Solutions: Bank Financing is the primary source of capital for individuals and companies to expand their business, to meet their working capital needs, purchase new equipment etc. Banks provides financial solution by giving them short term, long term, term loan, asset-based loan and credit cards etc. Indirectly, they are growing our industry sector.
- Cash management Services/ Treasury Management: Cash management involves collecting and managing cash flow of the companies from various types of activities i.e. operating, financing, investing. Banks play a very important role in this. As they are optimizing company’s liquidity while taking all important measures of risk factors. It is also known as Treasury Management.
- Money Market Accounts: This is best service which is provided by banks to small businesses to earn the interest on money which kept in their account. It minimizes the risk of investing because customer can withdraw their money at any time without any penalty when they need it. But these days, banks have imposed some restrictions on the number of withdrawals each month, still it’s beneficial to customers than other investments.
- Retail Banking: In this bank provides various financial services to individuals instead of businesses. It is another form of accepting surplus money from consumer and managing them by depositing it in a secure manner. Example: mortgage, personal loan, credit card etc. It’s also called consumer banking.
- Trade Finance: Trade Finance includes the movement of assets, transactions, or investments overseas into other markets. It ensures the safety of a purchaser or seller in trade finance. Banks often provide a needed service to make the transactions meaningful and safe.
- Book keeping: Bank bookkeeping is a process of recording and classifying the transactions of a bank. It also shows profit and loss made by bank services & also figuring out the true financial condition of bank by making comparative with previous year.
- Investment Banking: Investment banking is another important segment of banking operation that helps individuals or organizations raise capital and provide financial consultancy services to them. They act as intermediaries between security issuers and investors.
- Payroll Services: Banks also offers payroll services to business owners. In this, direct deposit is made by bank at decided date to employee’s accounts to handle the payroll distribution. This reduces the errors of many checks.
In short, Business or Corporate banking is a specialized division of commercial banking. It generates high profits for banks because of the large amount of money and interest involves in corporate loans.