2. Chapter
Bank Trust Services, Nondeposit Investment Products, and the Selling of Information Services 14
This chapter is designed to explore several of the most important
nondeposit financial services bankers have offered to the public in
recent years, including trust services, investments in stocks, bonds,
and mutual funds, insurance policies, and annuities and examine
their possible benefits for banks.

3. Trust Services
These Services are Centered on the Management of Property Owned By a Bank’s Customers, Such as Land, Buildings and Other Investments

4. Product-Line Diversification Effect
Offering More Than One Product or Service Through the Same Company in Order to Reduce the Overall Risk of the Revenues Flows Through the Individual Firm

5. Risk and Return With Traditional and Nontraditional Services
Where: NT is Nontraditional Services and
T is Traditional Services and
r is the Correlation Between Them

6. Economies of Scope
Employing the Same Management, Staff and Facilities to Offer Multiple Products or Services, Thereby Helping to Reduce the Per Unit Cost of Production and Delivery of Goods or Services

7. Nondeposit Investment Products in Banking
Stocks
Bonds
Proprietary Mutual Funds
Nonproprietary Mutual Funds
Fixed Annuities
Variable Annuities

8. Mutual Funds
Companies that Offer Shares in a Pool of Securities and Flow Through Any Earnings Generated to Shareholding Customers

9. Annuities
A Savings Instrument in Which the Customer Makes Cash Payments to an Investment Manager Who Places Them Into Earning Assets and Where Later the Purchaser Receives a Stream of Income From Those Assets

10. Convergence
The Bringing Together of Firms from Different Industries in Order to Create Conglomerate Companies Offering Multiple Services

11. Bank Offerings of Insurance Related Products
Life Insurance Policies
Life Insurance Underwriters
Property-Casualty Insurance Products
Underwriting Property-Casualty Insurance Risks

12. Customer Privacy
Protecting the Personal Information That Customers Supply to Their Financial-Service Providers So That Customers are Not Damaged By the Release of Their Private Data to Outside Parties