Commercial Banking Vs Investment Banking

Commercial banking refers to the services provided by banks that cater primarily to individuals and small to medium-sized businesses. These services typically include accepting deposits, offering savings and checking accounts, providing loans and credit facilities, and facilitating payment services. Commercial banks serve as intermediaries between depositors and borrowers, ensuring liquidity in the financial system while also managing risks associated with lending. Their primary focus is on maintaining customer relationships and supporting the local economy through various financial products.

Investment banking, on the other hand, involves a range of financial services primarily aimed at corporations, governments, and institutional investors. Investment banks assist in raising capital by underwriting and issuing securities, facilitating mergers and acquisitions, and providing advisory services for complex financial transactions. They play a crucial role in the financial markets by helping clients navigate the intricacies of large-scale financing and investment strategies, often involving substantial risk management and market analysis. Investment banking is characterized by its focus on capital markets and corporate finance.