Banks have always helped people in the majority of their transactions. These banks were among the first financial institutions ever created by man. These banks protect and multiply the clients’ money while ensuring that they will not get bankrupt in the process. A bank’s general responsibility is to act as the middle agent for the client and its transactions with other commercial entities. However, due to the huge scope of banking in the daily transactions in the financial market, it became necessary to differentiate them according to the activities that they are involved in.
Two of the most specific types of banking are the corporate and investment banking. Corporate banking is involved in the various transactions of small to large corporations and business ventures; the focus is on the corporate accounts. On the other hand, investment banking is involved in the investment transactions of various financial entities including corporations and governments; the focus is on the aspect of the investments. Let us differentiate corporate and investment banking.
Investment banks offer to help clients with different transactions based on bonds and securities. The clients are provided with advice on the proper acquisition of properties and assets. The clients also purchase from the banks the bonds and securities that would constitute these investments and would later provide them with profit without them working to use the investment. With the discretion of these investment banks, the client’s investment will then be used in the market as another investment, which will provide the client’s dividend at the periods specified. The investment banks do not only guard these assets but also take the risks for the client. These banks have the biggest loss if the investments fail. These investment banks usually offer advice to various clients who operate on a small or large scale. They can cater to the needs of small business ventures, but they can also be adept in helping large companies.
A corporation is a legal entity that is usually involved in business and financing. Corporations have shareholders who are co-owners of the company. These shareholders invested a certain increment of money to own the corporation. If a corporation succeeds, then its shareholders also succeed. But if the corporation fails, then all the shareholders-small or big time-will lose the money they had invested. Therefore, decisions made by the corporation as a whole necessitate a mediator who is adept in the ways of the financial market. This is where corporate banks come in. Corporate banking deals with the financial decision-making of corporations. The corporate banks are the ones who provide their clients-in this case, the corporations-with tools and analyses used for making correct decisions. The main goal would be to maximize the earnings and security of the corporation while minimizing the possibility of financial risks. The more stable and correct the decisions of the corporate banks would be, the better the corporation would fare.
Banks encompass all aspects of finances. Both corporate and investment banking still aim to protect the clients and their investments and still manage to ensure that the clients and banks both profit gainfully.