Wholesale banking is similar to other wholesale products, except that instead of providing goods at wholesale prices, it is large banks providing banking services at wholesale prices. There are many different types of services provided, from standard banking to expert advice and opinions.
Who Needs It?
Almost every bank and financial institution uses some type of wholesale banking. However, mmost wholesale banking is targeted to mortgage brokers, large corporations, real estate developers and investors, institutional investors (such as pension funds and government agencies), and other banks.
Wholesale financial transactions are also conducted between financial service companies such as other banks, insurance companies, hedge funds, and stock brokers.
What Do They Do?
Wholesale banks engage in slightly different activities compared to regular banks. Most wholesale banks focus on backing up their clients financially, but providing capital or other funds. They also focus on underwriting, market making, consulting, mergers and acquisitions, and fund management.
What Are the Perks?
Having a wholesale banking account opens up a lot of perks to the company involved, well beyond just having a traditional checking and savings account at an institution. Having a wholesale banker in your corner is like having a money specialist devoted to your needs helping you navigate the financial world.
Wholesale banking customers have access to expert teams that can help finance any project in a variety of ways. They also have access to expert risk management teams, that can look at any risk, from currency and banking, to traditional insurance risks. There is also the traditional cash management aspect of banking, and how deposits will work and remain safe, regardless of the economic conditions.
Many wholesale banks also give their clients access to up to date research on the various equity markets, and have specialists available to the company to help support the company’s growth, whether organically or by investing in other companies. There is also economic research, that can help businesses stay liquid during times of economic crisis.
However, wholesale banking is not for the individual investor, as these services and perks come at a hefty price.