The Three [3] Types of Banks

Join Our Mailing List Understanding Differences

[By Dr. David Edward Marcinko MBA CMP™]


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dem-thinkingThere are several different kinds of banks.

A general understanding of these types is suggested for any medical professional prior to launching a self-directed [ME, Inc], or even a guided investment strategy or wealth building portfolio effort with a financial advisor [FA], stock broker or wealth manager, etc.

This banking information is usually not included in any text on financial planning, or related, until now.


Definition of Retail Bank

A retail bank is a typical small mass-market financial institution in which individual customers use local branches; usually of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs).

Definition of Commercial Bank

A financial institution that provides services, such as accepting deposits, giving business loans and auto loans, mortgage lending, and basic investment products like savings accounts and certificates of deposit. The traditional commercial bank is a brick and mortar institution with tellers, safe deposit boxes, vaults and ATMs.

However, some commercial banks do not have any physical branches and require consumers to complete all transactions by phone or Internet. In exchange, they generally pay higher interest rates on investments and deposits, and charge lower fees.

Definition of Investment Bank

Investment banking activities are different than those of retail and commercial banking and include underwriting securities, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.





This brief review provides a retrospective on implications for modernity.



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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact:



8 Responses

  1. Why Bank of America deal might not cost it $17-B?

    Dr. Marcinko – So, how much will Bank of America’s expected $17 billion mortgage settlement cost the company? The answer is, almost certainly not that much.

    In mega-settlements negotiated with the government, a dollar is rarely worth an actual dollar.

    Any thoughts?



  2. Goldman Sachs

    GS has just agreed to a settlement worth $1.2 billion to resolve a U.S. regulator’s claims the bank sold Fannie Mae and Freddie Mac faulty mortgage bonds.



  3. The Sorry State of Bank Apologies

    Dr. Marcinko and Judge – According to Jesse Eisinger, securing admissions of wrongdoing is a step in the right direction, but there’s much work to be done to hold giant banking corporations accountable for their misdeeds.



  4. Banks’ fee bonanza dries up

    Changes in rules and customer behaviors are squeezing what was for decades a key source of revenue.–banks-fee-bonanza-dries-up

    Dr. Carey


  5. Definition of Credit Unions

    Dr. Marcinko – A credit union is a member-owned financial co-operative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.

    Many credit unions also provide services intended to support community development or sustainable development on local levels.

    So, don’t forget these institutions.



  6. The pitfalls of online banking

    A bank will invest hundreds of thousands of dollars to insure the integrity of their IT systems, but the average online bank client will have a $50 dollar router / wireless access point / firewall and some virus protection software protecting their information.

    If there is an account breach, where do you think it will come from? 99% of online account breaches come from the device that the end-user is using to access their accounts.

    When this occurs the bank or FDIC is not responsible for losses and generally will not reimburse for the losses.

    Dr. David Edward Marcinko MBA CMP™


  7. Secret Tapes Hint at Turmoil in New York Fed Team Monitoring JPMorgan

    Examiners are reportedly blocked from doing their job as “London Whale” trades blow up.



  8. Modern Update

    The most contentious conflicts (and partnerships) will be between banks and financial services startups that are completely reengineering decades-old practices, and traditional power players who are furiously trying to adapt with their own innovations, and total disruption of established technology & processes:

    Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks provide a valuable service, but online-only banks can offer many of the same services with higher rates and lower fees.

    Traditional Lenders vs. Peer-to-Peer Marketplaces: P2P lending marketplaces are growing much faster than traditional lenders—only time will tell if the banks strategy of creating their own small loan networks will be successful.

    • Traditional Asset Managers vs. Robo-Advisors: Robo-advisors like Betterment offer lower fees, lower minimums and solid returns to investors, but the much larger traditional asset managers are creating their own robo-products while providing the kind of handholding that high net worth clients are willing to pay handsomely for.

    As you can see, this very fluid environment is creating winners and losers before our eyes.

    Dr. David Marcinko MBA


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