INSTITUTIONAL CUSTOMER Meaning and
Definition
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An institutional customer is a term predominantly used in the financial industry to describe an entity that engages in business transactions with financial institutions, such as banks, investment firms, or insurance companies. This term encompasses a wide range of organizations, including corporations, government agencies, pension funds, endowment funds, non-profit organizations, and other similar entities.
Unlike individual retail customers, institutional customers typically have higher investment or financial needs and often require specialized and tailored financial services. These customers often have substantial capital and engage in large-scale transactions, such as borrowing significant sums of money, making substantial investments, or requiring complex financial instruments.
Institutional customers also have specific regulatory requirements and compliance standards, necessitating financial institutions to have dedicated teams or departments to serve them. These divisions within financial institutions cater to the unique needs of institutional customers by providing services like customized investment portfolios, extensive research and analysis, risk management strategies, and exclusive access to market information.
The relationship between financial institutions and their institutional customers is typically built on long-term partnerships, as these customers are seen as key contributors to the financial institution's growth and stability. Given their importance and significance in the market, financial institutions often compete fiercely to attract and retain institutional customers, offering incentives, discounted fees, higher interest rates, and other value-added services to maintain and expand their customer base.
Common Misspellings for INSTITUTIONAL CUSTOMER
- unstitutional customer
- jnstitutional customer
- knstitutional customer
- onstitutional customer
- 9nstitutional customer
- 8nstitutional customer
- ibstitutional customer
- imstitutional customer
- ijstitutional customer
- ihstitutional customer
- inatitutional customer
- inztitutional customer
- inxtitutional customer
- indtitutional customer
- inetitutional customer
- inwtitutional customer
- insritutional customer
- insfitutional customer
- insgitutional customer
- insyitutional customer
Etymology of INSTITUTIONAL CUSTOMER
The term "institutional customer" is comprised of two main parts: "institutional" and "customer".
- "Institutional" refers to something related to an institution, which can be a large organization, establishment, or body. It comes from the Latin word "institutio" meaning "establishment", derived from the verb "instituere" which means "to set up" or "to establish".
- "Customer" refers to a person or an organization that purchases goods or services from another person or organization. It stems from the Middle English word "custumer" via the Anglo-French word "custumier" derived from the Latin word "consuetudinarius", meaning "he who is subject to a duty or tribute". This is based on the Latin word "consuetudo" meaning "custom" or "habit".
