What is the difference between a custodian bank and a retail bank?

What is the difference between a custodian bank and a retail bank Introduction: The Financial Landscape Hello, everyone! The financial world is a vast ecosystem, with various institutions serving different purposes. Today, we'll focus on two key players: custodian banks and retail banks. While both are banks, their functions and target audiences are quite distinct. Custodian Banks: Safeguarding Assets Custodian banks primarily cater to institutional clients, such as asset managers, hedge funds, and pension funds. Their core function is to safeguard and administer these clients' financial assets, including stocks, bonds, and other securities. They provide secure storage, manage settlements, and handle corporate actions like dividends and stock splits. Additionally, custodian banks offer services like foreign exchange, cash management, and risk analytics. Retail Banks: Serving Individuals and Small Businesses On the other hand, retail banks are the ones we're most familiar with as individuals. They serve the general public, offering a wide range of financial products and services. From basic savings and checking accounts to loans, mortgages, and credit cards, retail banks cater to the day-to-day financial needs of individuals and small businesses. They also provide services like wealth management, investment advice, and insurance products.