Commercial Banking

Industry Overview

In the most basic terms, commercial banks take deposits from individual and institutional customers, which they then use to extend credit to other customers. They make money by earning more in interest from borrowers than they pay in interest to those whose deposits they accept. They're different from investment banks and brokerages in that those kinds of institutions focus on underwriting, selling, and trading corporate and municipal securities.

Most of us maintain checking accounts at commercial banks and use their ATMs. The money we deposit in our neighborhood bank branch or credit union supports economic activity through business loans, mortgages, auto loans, and home repair loans. Banks also provide loans in the form of credit card charges, and render local services including safe deposit, notary, and merchant banking. The bank branch or credit union office remains the cornerstone of Main Street economic life.

Banks have been undergoing rapid change over the past decade or so. Traditionally conservative businesses, most large banks now offer banking services over the Web. Branch banks have proliferated as well, as banks like Washington Mutual attempt to become as ubiquitous as 7-Eleven stores. The 1999 repeal of the Glass-Steagall Act, which limited the businesses commercial banks could operate in, created huge new areas of business as well. Many commercial banks have gone into nontraditional commercial banking businesses such as selling insurance products and securities.

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Commercial Banking Job Listings