What exactly the difference between core banking and retail banking?

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First of all, if you want to understand the difference between core banking and retail banking, you need to know the exact meaning of the core, retail banking and it’s features, key points, and history.

But let me discuss the difference between them first because I assume you know that.

Why core banking and retail banking difference is not possible ?

What exactly the difference between core banking and retail banking? BanksForYou

Retail Banking in the bank type that a user uses provide by banks to process transactions for the mass public. In simple, it is just a bank type. Want a detailed understanding click here.

Whereas the core banking is centralized on which the retail or any corporate bank is hosted on the server to facilitate to transact online. Understanding core banking in a broader sense.

However, if you have come to get what you need the difference, I will definitely differentiate them from other perspectives.

Difference :

PointsCore BankingRetail Banking
MediumCentralized System for bankType of bank for public
Starting Date19841955
Known forCore banking also commonly known as a core banking solution.The retail bank also is known as “Consumer” or “non-commercial” bank.
ServicesNet-banking for the public.Current/Savings Account for the mass public.

Next, we should move into understanding the definitions and other properties to better justify each objective on their side.

Retail Banking :

What exactly the difference between core banking and retail banking? BanksForYou

Definition –

Retail bank also known as “Consumer” or “non-commercial” bank. Retail banks are just created for the mass public or for the citizens. Retail banking is definitely an larger profit source for the bank.

This banking system is for the public and thus the products are also limited. This includes checking account, savings account, loans, investment, ATM’s, Credit/Debit Cards Internet banking and FD’s.

Have you noticed a point that when you bank online you get the option of corporate login and retail login among that you chose the second one.

Example –

Let’s assume, that Mr. Das has retired from the service and he want to save his earnings for the future along with make use of the money by earning interest and decides to create a fixed deposit account on the other hand he want to invest some on the mutual funds and along with it he needs some money to renovate his home, means a loan.

So there’s everything that a normal public need in his lifetime the retail banks have this services in a nutshell. So retail banks can deposit his money to their safe deposits, can provide information regarding the right mutual funds investment and providing him with a loan.

History –

Do you know that when the Retail banking concept started ?

When there was trade among many countries, the business was required to exchange the currency to start a business. This problem created chaos among business owners.

This created a concept of creating a big business of lending and depositing money for the business.

The business was started giving off loans to small businesses to the normal public which in turn started returning them into profits and developing economies.

Want to know more visit to Wiki.

Core Banking :

What exactly the difference between core banking and retail banking? BanksForYou

Definition –

Core banking also commonly known as core banking solution is a centralized system which is a central server of a specific bank to connect to its branches in terms, it is provided to facilitate money transactions online by the bank account owners without visiting any specific branch.

The acronym for Core is “Centralized Online Real-time Exchange“. This system can faciliate a user with the following products like

  • Viewing transactions like NEFT
  • Investment can be done like PPF, Mutual Funds
  • Issuing Loans like Education Loan
  • Buying things online using credit/debit cards
  • Managing or Transfering funds online

Example –

Suppose, you live in city in Delhi where your bank has it’s sub-branch where you can process your transactions and ask to assist you. But you discover is a long line for transferring funds from the bank to the other bank.

Here, the Core banking comes into rescue it helps you to transfer funds to other banks within 10 minutes. Don’t have an account yet ?

Check out how to create a net-banking account full online process step by step in union bank.

History –

In the ancient banking system, all banking processes required human resources which were time-consuming and expensive.

Transferring money was a pain at that time because the documents and calculations were documented in physical files. And banks were a non-accessible thing at that time for the common public.

There was a main problem that pricked the banking system to adopt this Core banking and that is if you have a bank account every transactions must be performed in the same bank branch.

But this core banking opened the new doors of accessing global bank branches from your device in turn made easy for us to transfer, invest and manage our bank account without visiting bank and moreover now you don’t need to visit your same branch account to access your account.

Conclusion :

At last, it impossible to differentiate between these two but I am dam sure there might be some ideas having on your brain.

So let’s have a chat on this if any other difference you need, comment and I will surely reply on that.

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