Products: Diversification and Innovation

Abstract

The banking sector has been viewed from both the outside and inside as having enjoyed – or suffered – a much more stable product range than most comparable service industries. The two traditional core businesses of banking have been the taking of deposits, which has led to banks’ dominating most national payments systems around the world, and the extension of credit in a variety of forms. Most banks have expanded into related activities: the trading of currencies and securities as an adjunct to their role as a principal investor; the management and custody of third party funds, and the sale of financial advice in various forms. Where no legal barriers exist, they have expanded as ‘universal’ banks into – and usually come to dominate – the local securities sector as underwriter, trader, adviser and principal.