In essence, banking is a commoditised product (or service). Most financial products are of long standing and all of them are nothing more (or less) than a series of cash flows. The more exotic “structured products” are often created to meet a perceived customer need or benefit, rather than the result of customer enquiry. Then again perhaps sometimes, a bit like Steve Jobs, one has to tell the customer what they want.

But banking products are not really like Apple products. To a great extent, most of the main products can be obtained (provided the specific customer is acceptable to the bank in question) from most banks. We summarise the main ones in Table 2.1. Even when a bank thinks it is the first one to introduce a type of product and jealously guards its “proprietary” knowledge, often one finds there is another bank just a few minutes' walk down the road that is offering the same product, just under a different name. So, as we said, banking and financial services are a commoditised product, more akin to a tin of baked beans than the Saturn V rocket (which is another reason this author finds it amusing that bank quantitative analysts are called “rocket scientists” by the business media. They are as much rocket scientists as Sunday league pub footballers are Premiership football players.) And with commoditised products, much of the “unique selling point” for an individual bank comes from superior customer service, ...

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