Corporate Banking – Services, Features Benefits

Corporate Banking – Services, Features Benefits

5 mins read2.9K Views Comment
Rashmi
Rashmi Karan
Manager - Content
Updated on Feb 24, 2023 16:58 IST

The article talks about corporate banking, its features, business models, and benefits of using corporate banking.

2023_02_What-is-Corporate-Banking.jpg

Corporate banking is a type of banking service that caters to the financial needs of large businesses. It aims to support profitable investments for companies’ installation, modernization, expansion, and diversification in the corporate commercial and industrial sectors. It is one of the dominant elements for national economic development. Corporate banking is regarded as a specialized banking service. 

Corporate Banking offers various banking solutions such as credit management, asset management, cash management, and underwriting to large corporations and small and medium-sized businesses.

Content

What Services Does Corporate Banking Offer?

Corporate banking focuses on responding to the day-to-day operational needs of companies, corporations, and institutions and their treasury management.

Therefore, it offers services not provided, for example, by commercial banks.

Among the services offered by corporate banking, the following should be highlighted:

  • Cash Management: Solutions for managing the company’s treasury.
  • Trade Finance: Products focused on companies that trade abroad.
  • Working Capital: Focused solutions for managing companies’ liquidity and working capital in the short term.
  • Securities Services: Management of financial assets.
  • Supply Chain Finance: Solutions focused on optimizing the working capital of companies.
  • PSD2: A system to carry out payments and operations in digital portals with security.
  • Personal manager: A personal financial advisor manages communication between the client and the bank.
  • Preferential treatment: They have preferential treatment to avoid queues and waiting times.
  • Payment gateways and POS: Systems for collecting goods or services through credit cards.

Look into top bank courses for jobs for a solid start in the banking sector. Expand your skill set with online banking courses.

Types of Services Offered by Investment Banks
Types of Services Offered by Investment Banks
Investment banking is the division of financial institutions that works for corporations and governments through underwriting, merger and acquisitions advisory services. To understand this concept, first of all, we need...read more

Corporate Banking Business Model 

The business model of corporate banking is based on a close and strategic relationship with clients, providing them with global solutions adapted to their requirements, taking into account the particularities of their sector of economic activity as well as the markets in which it operates. There are several pillars on which such banks pivot the contribution of value: collaboration between teams located in different geographies and specialized by sectors of economic activity, as well as the support and collaboration of experts in products such as Structured Financing, Treasury, etc.

Explore investment banking courses

Characteristics of Corporate Banking

The features of corporate banking are as follows –

Financial Stability Score: The business’s credit history includes details about how your business account has been used or managed. It affects the market value of the company’s stock, the interest rates charged on loans to the company, etc.

Authority: Opening corporate bank accounts for a corporation requires the board of directors’ approval. This means they must get approval through some formal vote or company resolution. The treasurer is also the one who often sets up corporate banking for a business.

Client: The commercial banking division of a bank generally helps both medium and large corporations.

Responsibility: The contents of corporate accounts are not the personal property of individual board members but rather belong to the corporation itself. This is because the law recognizes companies as separate legal entities. It indicates a certain degree of autonomy in the company’s accounting practices. It also implies that personal creditors of a corporation’s board of directors have no right to the contents of a company’s corporate account.

Difference Between Investment Banking and Commercial Banking
Difference Between Investment Banking and Commercial Banking
Investment banking and commercial banking are two divisions of the banking industry that provide substantially different services. Investment banks speed up the buying and selling bonds, stocks, and other investments....read more
What is Net Banking and How it Works?
What is Net Banking and How it Works?
Net banking, or online banking, enables individuals to access their bank accounts and perform various financial transactions through the internet. This includes activities like checking account balances, transferring funds, paying...read more

Benefits of Corporate Banking

With all its advantages, corporate banking is an excellent option for companies of all sizes. The benefits are the following:

1. Lets your business thrive

Corporate banking can help your business expand with ease. You can use your account to partner with other businesses or send bulk payments, which helps when you must allocate more money to spend on staff. In addition, they provide clearer metrics to follow the development of your company.

2. Facilitates loan processes

A corporate bank account provides potential investors with information about the financial health of your company, which can help them make a more informed investment decision. The likelihood of obtaining financing from a financial institution or investment capital from an individual investor improves if your company has a corporate account.

3. Promotes a more elegant image for your company

It is important to have a corporate account because people will see it as a sign of legitimacy. Also, having all your cash managed under one name instead of multiple names is an added benefit of having a corporate account. People’s perceptions of your company are directly related to how well you manage your company’s financial affairs.

4. Offers comprehensive financial procedures and methods

Corporate banks provide comprehensive statements on the activities of companies, allowing them to assess which costs could be reduced, which sectors require additional investment, and which income streams are the highest. This is extremely important for new businesses.

5. Simplified tax audit

Your business needs to set up a corporate account to take advantage of the increased transparency of having one. It can help you accurately determine the taxable proportion of your business based on your company’s net profits.

Commercial Banks – Overview, Types, and Functions
Commercial Banks – Overview, Types, and Functions
A commercial bank is an entity whose economic activity is financial intermediation. In other words, it takes deposits from the public and directs those resources to grant credits to obtain...read more
Difference Between Central Bank and Commercial Bank
Difference Between Central Bank and Commercial Bank
Commercial and central banks are essential parts of the country’s economy. While commercial banks deal directly with the end users, central banks offer their products and services to the government...read more

Conclusion

Today, every business needs a corporate bank account because it has many benefits that cannot be obtained with any other combination of financial products and services. Corporate banks are legitimate and help businesses succeed because of their openness and the high quality of service they provide. Corporate Banking is undergoing a series of changes, which in turn are creating new opportunities for banks operating in this sector. Some of these changes are driven by new technologies such as open APIs. However, such changes are driven by changes in expectations from the corporate sector, where bank offerings are expected to include more agile cross-products with integrated credit management and pricing.


Top Trending Finance Articles:

Financial Analyst Interview Questions | Accounting Interview Questions | IFRS Certification | CPA Exams | What is Inflation | What is NFT | Common Finance Terms | 50-30-20 Budget Rule | Concept of Compounding | Credit Cards Rewards System | Smart Budgeting Approaches

About the Author
author-image
Rashmi Karan
Manager - Content

Rashmi is a postgraduate in Biotechnology with a flair for research-oriented work and has an experience of over 13 years in content creation and social media handling. She has a diversified writing portfolio and aim... Read Full Bio