FT Guide to Banking

2

An overview of different aspects of banking

Banks started out as fairly straightforward businesses, taking in deposits, making loans and providing a payment mechanism. But they grew. They now conduct a much wider range of activities, and it can be difficult to define banking activity in the modern world. Figure 2.1 provides some clarity by grouping the activities into four different types of banking. Some organisations concentrate on providing services in just one, or perhaps two, of the segments, others are universal banks offering a full range of banking. This classification is not perfect – there are many banks that do not neatly fit into these groups, and there are other ‘banking’ activities not listed here – but it does allow us some ...