A Quick Guide To One of Canada’s Most Respected Industries: Banking 101


Canada’s banking industry is one of the most highly-regarded around the globe.

Many aspiring and recent graduates herald the Canadian banking industry as their career destination of choice. Nevertheless, there seems to be a great many questions that surround the world of banking and finance: What precisely is banking? What is the difference between retail and investment banking? What does a career path in the industry look like?

In order to get a better sense of what it is banking entails, it is imperative to make clear the various types of banks and banking services:

Retail banking, also commonly referred to as commercial, personal or consumer banking, involves everything we would come to understand of banks – as individual consumers. In this capacity, your bank is where you deposit your money, where you are paid, where you may get a student loan, where you are likely to receive a mortgage loan, and register and pay for your credit card purchases. Put simply, a retail bank executes transactions directly with consumers.

The second type of banking is commercial banking. Also referred to as corporate banking, offers the same services retail banking offers, however commercial banking exclusively services corporations and large businesses. Retail and commercial banks offer specific products including mortgages, lines of credit, and cross-border banking transactions between retail/commercial clients.

The third and most profoundly different type of banking is investment banking. Investment banking put simply, offers investment services to individuals, corporations, and even governments. Specifically, investment banks assists their clients in raising capital by underwriting or acting on behalf of the client in the issuance of a tradeable financial asset – or security.

Moreover, investment banks unlike commercial or retail banks do not accept deposits. Canada has never formally separated its investment and commercial banks. This means that Canadian banks can offer both commercial and investment services, and do so under separate arms within the same bank.

The Canadian Banking System

The banking industry is a particularly attractive industry in Canada for professionals young and old, precisely because of Canada’s banking system.

Having placed 1st in the World Economic Forum’s best banking system for the past 6 years, the Canadian banking system is heralded for its solid funding and fiscal restraint regarding consumer lending. Indeed, Canadian banks places markedly stringent policies on loans – in fact, the most stringent internationally.

Canadian regulators also resisted considerable pressure from bank executives to loosen lending restrictions, during economic boom, consequentially leaving the Canadian system and regulators more equipped in navigating the global financial crisis.

For more resources on the banking industry, check out our Banking Career Guide!