Banking Banking Basics What Is Wholesale Banking? Wholesale Banking Explained in Less Than 4 Minutes By Yvette Glover Yvette Glover Yvette is a financial specialist and business writer with over 16 years of experience in consumer and business banking. She writes in-depth articles focused on educating both business and consumer readers on a variety of financial topics. Along with The Balance, Yvette's work has been published in Fit Small Business, StoryTerrace, and more. learn about our editorial policies Updated on December 31, 2021 Reviewed by Charlene Rhinehart Reviewed by Charlene Rhinehart Twitter Website Charlene Rhinehart is an expert in accounting, banking, investing, real estate, and personal finance. She is a CPA, CFE, Chair of the Illinois CPA Society Individual Tax Committee, and was recognized as one of Practice Ignition's Top 50 women in accounting. She is the founder of Wealth Women Daily and an author. learn about our financial review board Share Tweet Pin Email Definition Wholesale banking delivers financial products and services that meet the unique business needs of institutions such as large corporations, government agencies, and other banks. It also offers consulting, merger and acquisition assistance, and bulk currency conversion, which retail banking doesn’t offer. Photo: Klaus Vedfelt / Getty Images Wholesale banking refers to providing financial services to large institutions. Such services include cash management, working capital loans, and trade transactions. This banking sector caters to large organizations such as government agencies, high-revenue corporations, and other banks. Wholesale banking differs from retail banking in the services it provides as well as the clients who need it. To understand wholesale banking, you’ll need to know why it’s necessary for large institutions and how it operates. Definition and Examples of Wholesale Banking Wholesale banking delivers financial products and services that meet the unique business needs of institutions such as large corporations, government agencies, and other banks. It also offers consulting, merger and acquisition assistance, and bulk currency conversion, which retail banking doesn’t offer. Examples of wholesale banking services include: Large fund management Bulk currency exchange Trade transactions Consultancy Working capital financing Mergers and acquisitions Bank-to-bank lending Services Not Provided by Wholesale Banks Wholesale banking doesn’t offer retail and consumer products that are popular among small businesses and consumers, such as: Home mortgagesPersonal deposit accountsSmall-business loansSmall-farm loansConsumer loans Note Some banks that are well known for their retail and consumer banking services, including Wells Fargo and Chase Bank, also offer wholesale banking. Alternate name: Wholesale funding How Wholesale Banking Works Wholesale banking provides much-needed services to institutions that are too large to be effectively managed under retail banking. Wholesale banks frequently cater to large companies, government agencies, and other banks. Wholesale Banking for Large Corporations These high-revenue institutions need banking services that can manage cash, daily transactions, and loans. By contrast, retail banking is often structured around monthly lower-volume transactions. Given this, corporations making millions of dollars in revenue would likely pay more with retail banking than with wholesale. For example, Wells Fargo’s Wholesale Banking serves corporations with annual revenue sales of $5 million dollars or more. Corporations with that much revenue have more financial transactions to manage than the typical small business. Wholesale banking is designed to accommodate large currency exchanges and higher transaction volumes at a lower cost. Essentially, these large institutions receive discounted prices because of the sizes of the companies and the bulk of the services needed. In this way, wholesale banks are similar to wholesale stores whose consumers save money by buying groceries or home goods in bulk. Wholesale Banking for Government Agencies Wholesale banking also addresses the unique needs of government institutions. Local and municipal governments often need more than just a place to store money. They may require additional support from bankers with government expertise. Wholesale banking can provide account management from bankers with government experience to better manage financial accounts. Managing government banking requires more considerations than simple commercial banking. Wholesale banks have to provide banking support and financial solutions that don’t violate local regulations or create conflicts of interest. For example, account management for local governments can involve managing public funds, which comes with its own set of regulations. Government banking account managers handle common banking needs while also considering additional risks, public relations, and local regulations and laws. The increased public scrutiny can make government banking riskier than other banking sectors, but it’s necessary to ensure that local governments get the banking services that any business needs. Wholesale Banking for Other Banks Banks need loans just like people do. Bank-to-bank lending, working capital loans, and investments are common transactions at wholesale banks. For example, if you wanted to start a small community bank in your neighborhood, you would need financial resources and a place to manage your money. It wouldn't be easy to start a bank for a business, as the banking industry is highly regulated. However, every business needs capital to purchase equipment, acquire property, and pay employees. Wholesale banking could provide your bank with a business loan it needs to help with operation costs. Retail banking provides a way for consumers and small businesses to manage funds, get loans, and get financial services. Wholesale banking is subject to federal government oversight by the same agencies that regulate the retail banking sector, including the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC). Key Takeaways Wholesale banking provides loans, cash management, and financial services to large institutions, banks, and government agencies.Its services include capital loans, bank-to-bank lending, mergers and acquisitions, and trade transactions.The clientele and the services offered differ between wholesale banking and retail banking.Both wholesale and retail banking are governed by the same federal regulators. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Wells Fargo. "Wholesale Banking." Accessed Oct. 28, 2021.