Learning Objectives:

• Identify the main categories of traditional bank products and services.

• Explain the shift from traditional to electronic and non-traditional services.

• Describe the importance of cross-selling and marketing in banking.

5.1 Traditional Products and Services
The core of a bank’s business involves offering traditional products to individuals and businesses :

• Deposit Accounts: Such as checking accounts (demand deposits), savings accounts, and time deposits (certificates of deposit).

• Lending: Providing various types of loans, including consumer loans (autos, personal), real estate loans (mortgages), and commercial loans (business financing) .

• Payment Services: Providing the infrastructure for customers to transfer funds and make payments, primarily through cash and checks .

5.2 Nontraditional and Electronic Services
Banks have evolved to offer a broader range of services to compete and meet changing customer needs :

• Electronic Services: This includes online and mobile banking, ATM access, direct deposit, and electronic bill payment .

• Trust and Investment Services: Banks increasingly offer services like personal financial planning, trust administration, investment products (mutual funds, annuities), and retirement planning .

• Business and International Services: For corporate clients, banks provide advanced cash management solutions, capital market access, and international payment services .

5.3 Marketing and Cross-Selling
Banks are sales organizations that actively market their products to both existing and potential customers. Cross-selling—the practice of offering additional services to an existing customer, is a key strategy . A current customer is more profitable than a new one, so banks train employees to identify customer needs and recommend suitable products, such as offering a mortgage to a customer with a checking account or a credit card to a customer with an auto loan .