How do banks generate income?

[fauzan Ichsan]

Bank is an establishment known for financial services but what they do these days is way more than that. And the things they do are both legal and illegal, still, they cover up under the guise of the legality that covers the sector.

Mind you, you forgot to add that;

1. They launder money.
2. They broker onshore and offshore deals (both legally and illegally).
3. They steal money from customers' accounts through double and unexplainable charges.
4. They blackmail their customers and steal the money of the faint in heart.
    And many more...

There is a lot that will always make me sceptical of banks.

3. They steal money from customers' accounts through double and unexplainable charges.

I don't know how many times that has happened to me, and the worst thing is that it is claimed and they turn a blind eye as if it were a platform problem, this happens a lot since it was decided to carry out transactions virtually now they can make their excuses for steal no problem. The truth is that many do not trust the banks, i have had very bad experiences, and less in the loans that they make, since in addition to the fact that the interests, are exuberant and increase every month, they use loans with collateral as a requirement, which in my opinion could bring anyone to ruin, that's why I prefer to take care of myself with them, i only use it for necessary things, because as an option to  save my money never... imagine it going bankrupt (goodbye to my efforts)... I prefer to invest it and save the earnings in virtual wallets I feel more secure with these.

the burdensome interest system seems to bind consumers to continue paying interest, just imagine that at the beginning of the installment the interest expense is greater than the principal, so that it can be said that at the beginning of the installment we only pay interest, and in the calculation the bank seems to take profit up front, therefore we have to be careful when dealing with the details of the installments, otherwise it will seem as if we have been cheated, but the bank can also make a solution with the capital they provide to start a business, but we also have to be observant in the calculations

[Obari]

One of the way where banks have an upper edge to accumulate more money with the money of users who
are not using their money and just leave it as savings for longer time frame.

And this is where the adoption of bitcoin  comes in, rather than leave your money with banks to enrich themselves  with it, and paid peanuts in form of interest a d also requiring  a whole bulk of documents when claiming your money, the option of investing in Bitcoin  should be the best as there are more possibilities of making more money if everything been equal and maket moves very fine.

There is a form known as the POD ( Payable on Death) form and I will strongly advice anyone who has some reasonable sum of money in the bank to always demand for this form  as this will save your family a whole lot of stress if one passes away else just buy bitcoin  and keep your seedprase in a safe and secure  place where it can be accessed in case of death.

[Adams0001]

Banks generate revenue in a variety of ways, but the most important is through the interest they collect on the loans they make. When a bank makes a loan to a consumer, that person must pay interest on the loan. This interest is normally calculated as a percentage of the loan amount and is paid to the bank on a regular (monthly or quarterly) basis. A bank's ability to charge interest on a loan is affected by a number of factors, including the type of loan, the borrower's creditworthiness, and the overall level of interest rates in the economy.

Investment operations are another way for banks to make revenue. Many banks have investment divisions that invest in a variety of assets including stocks, bonds, and real estate. The returns on these investments can provide the bank with a considerable stream of revenue.

[harapan]

In Europe banks have come up with a charge from 1-3% depending on the country you are on money on arrival.For example if you exchange crypto through some exchange online and receive money in your account,let's say 1000 dollars the bank get from 10-30 dollars in just one single such transaction.This was not before and this means that the banks are always looking for more ways to "steal" people from money that they belong to them,just like in this case when you got money in arrival.All other mentioned ways of course are well known,just wanted to add this new invention of Europe banks from about 7-8 months now.

That's huge. I mean, you are paying them a fee for just a transaction like sending or receiving, and all banks in Europe are doing this? This is very hard for the customers as they are forced to pay that fee, and I would say it is some kind of theft. We are just lucky that this is not the same in our country if you transact within your bank, but if your bank is different and you transact to another bank, that is where the fees start, which are also huge but not the same in your country.

It's a crazy charge and the first time I've heard of it. Honestly, I don't believe in that charge. If I remember correctly, the transaction fees of banks in my country range from 0.1% to 0.3% or less, and that's a hefty fee for many people. I don't believe that is happening in developed countries like Europe, and their people will accept those huge transaction fees. Even e-wallets don't charge such high fees, how can banks do that? I really doubt these.

Those are actually very ridiculous numbers.  So if I'm being charged 3% of the money I  received,  how much will I be charged for transferring that same amount of money?  It's also a very fraudulent act because usually, the person sending the money bears the transaction charges, which means the bank is charging twice for a particular transaction.
This is hard to believe.
I believe the bank can do this for their customers involved in illegal activities like money laundering, drugs, embezzled funds, and so on,  but to charge that kind of amount on honest people that make an honest living is absurd.  I know the banking institutions are dirty as fuck,  but I don't think they can openly do things like this and nothing would be don't about it. 

[Fortify]

Financial institutions (banks) are responsible in handling financial issues, records, accounts and income of individuals, companies, churches and organizations. They respond promptly according to your demands on your accounts, they also have zero tolerance for fraud and are very security conscious, security intelligence and anti financial crime expertise but they've policies of not collecting dime from customers accounts yet banks are most wealthiest institutions on earth.

How do they make money?
* mortgage - using some billionaires account to buy housing properties and leasing them
* estate and lands with same patterns
* SMS alert charges
* Transfer charges
* Syphons dormant accounts or dead people accounts that are inactive with enough money in it.
* ATM and investment cards
* sales of currencies like dollar to naira
* preparation of international documents
* savings people's valuables like gold, certificate, court documents, WILLS, and so on.

This is what makes financial institutions very wealthy.

Most of the time, at least before the ridiculous inflation in the past couple years, banks were not particularly profitable and were mostly running on low margins, similar to supermarkets - where they made money from sheer volume of transactions instead of high profits from each one. Now though they are making lots more money between the amount they get in interest from the central bank and the tiny amounts they pay out to savers, while also able to easier hide profitable fees in growing mortgage rates.

[TheGreatPython]

One of the way where banks have an upper edge to accumulate more money with the money of users who
are not using their money and just leave it as savings for longer time frame.

And this is where the adoption of bitcoin  comes in, rather than leave your money with banks to enrich themselves  with it, and paid peanuts in form of interest a d also requiring  a whole bulk of documents when claiming your money, the option of investing in Bitcoin  should be the best as there are more possibilities of making more money if everything been equal and maket moves very fine.

There is a form known as the POD ( Payable on Death) form and I will strongly advice anyone who has some reasonable sum of money in the bank to always demand for this form  as this will save your family a whole lot of stress if one passes away else just buy bitcoin  and keep your seedprase in a safe and secure  place where it can be accessed in case of death.

People who believe in Bitcoin have started keeping their money in Bitcoin long ago but those who don't believe in it and are blind followers of these traditional financial institutions, will never be able to understand this and they will keep depositing their money in the banks whether they are being misused by the banks for personal gains or whatever they are doing, they believe that their money is safe with them so they rest assured.

On the other hand, banks and other financial institutions along with official government authorities are against Bitcoin for this sole reason because they know if all people start using Bitcoin and stop keeping their money at the banks, they will be doomed because they won't have any money in that case.

[carlisle1]

One of the way where banks have an upper edge to accumulate more money with the money of users who
are not using their money and just leave it as savings for longer time frame.

And this is where the adoption of bitcoin  comes in, rather than leave your money with banks to enrich themselves  with it, and paid peanuts in form of interest a d also requiring  a whole bulk of documents when claiming your money, the option of investing in Bitcoin  should be the best as there are more possibilities of making more money if everything been equal and maket moves very fine.

There is a form known as the POD ( Payable on Death) form and I will strongly advice anyone who has some reasonable sum of money in the bank to always demand for this form  as this will save your family a whole lot of stress if one passes away else just buy bitcoin  and keep your seedprase in a safe and secure  place where it can be accessed in case of death.

People who believe in Bitcoin have started keeping their money in Bitcoin long ago but those who don't believe in it and are blind followers of these traditional financial institutions, will never be able to understand this and they will keep depositing their money in the banks whether they are being misused by the banks for personal gains or whatever they are doing, they believe that their money is safe with them so they rest assured.

On the other hand, banks and other financial institutions along with official government authorities are against Bitcoin for this sole reason because they know if all people start using Bitcoin and stop keeping their money at the banks, they will be doomed because they won't have any money in that case.

I see that reason why the government is really eager to stop the rise of crypto, that's include Bitcoin. knowing that if knowledge
increase about keeping your money in an encrypted wallet will keep your savings safer.

Just a good knowledge and the banking industry will be affected, for sure if large numbers of people start using this system
a collapse may take place.

Banking business runs around the save money of each end user, without any deposit it will break the cycles.

[Obari]

One of the way where banks have an upper edge to accumulate more money with the money of users who
are not using their money and just leave it as savings for longer time frame.

And this is where the adoption of bitcoin  comes in, rather than leave your money with banks to enrich themselves  with it, and paid peanuts in form of interest a d also requiring  a whole bulk of documents when claiming your money, the option of investing in Bitcoin  should be the best as there are more possibilities of making more money if everything been equal and maket moves very fine.

There is a form known as the POD ( Payable on Death) form and I will strongly advice anyone who has some reasonable sum of money in the bank to always demand for this form  as this will save your family a whole lot of stress if one passes away else just buy bitcoin  and keep your seedprase in a safe and secure  place where it can be accessed in case of death.

People who believe in Bitcoin have started keeping their money in Bitcoin long ago but those who don't believe in it and are blind followers of these traditional financial institutions, will never be able to understand this and they will keep depositing their money in the banks whether they are being misused by the banks for personal gains or whatever they are doing, they believe that their money is safe with them so they rest assured.

On the other hand, banks and other financial institutions along with official government authorities are against Bitcoin for this sole reason because they know if all people start using Bitcoin and stop keeping their money at the banks, they will be doomed because they won't have any money in that case.

I see that reason why the government is really eager to stop the rise of crypto, that's include Bitcoin. knowing that if knowledge
increase about keeping your money in an encrypted wallet will keep your savings safer.

Just a good knowledge and the banking industry will be affected, for sure if large numbers of people start using this system
a collapse may take place.

Banking business runs around the save money of each end user, without any deposit it will break the cycles.

I don't think the major reason why the government  is fighting this is because of dominance, well I'm only speaking from my personal point of view especially  about my country and the reason I think the government  of my country  is fighting  Bitcoin  and cryptocurrency at large is to avoid  the several cases of untraceable scam transactions through bitcoin since bitcoin  transactions  can't be track.
I also got a popular  bitcoin  enthusiast in my country talking about bitcoin  and cryptocurrency  at large and he also explained and made me understand  that the government  of my country isn't fighting  these cryptocurrencies per say but what they're doing is avoiding been associated  with bitcoin  and anyone doing this, should  be doing it at their own risk without wanting the government  fight for them in case there is scam, fault or complications with the transactions.

[Freddie Boyer]

I don't think the major reason why the government  is fighting this is because of dominance, well I'm only speaking from my personal point of view especially  about my country and the reason I think the government  of my country  is fighting  Bitcoin  and cryptocurrency at large is to avoid  the several cases of untraceable scam transactions through bitcoin since bitcoin  transactions  can't be track.
I also got a popular  bitcoin  enthusiast in my country talking about bitcoin  and cryptocurrency  at large and he also explained and made me understand  that the government  of my country isn't fighting  these cryptocurrencies per say but what they're doing is avoiding been associated  with bitcoin  and anyone doing this, should  be doing it at their own risk without wanting the government  fight for them in case there is scam, fault or complications with the transactions.

Well, taking advantage of bitcoin's intrinsic anonymity is necessary. But, the question is why your government is doing it and the answer is that it's all to avoid unhealthy transactions, misuse and so on. that's why it's no wonder that regulations are tightened because they are unable to track bitcoin transactions.

My personal opinion is not the dominance that is seen there, but they want to know more about the technology that is in BTC and they only use their special rights to easily enter and monitor it.

[marcous]

I don't think the major reason why the government  is fighting this is because of dominance, well I'm only speaking from my personal point of view especially  about my country and the reason I think the government  of my country  is fighting  Bitcoin  and cryptocurrency at large is to avoid  the several cases of untraceable scam transactions through bitcoin since bitcoin  transactions  can't be track.
I also got a popular  bitcoin  enthusiast in my country talking about bitcoin  and cryptocurrency  at large and he also explained and made me understand  that the government  of my country isn't fighting  these cryptocurrencies per say but what they're doing is avoiding been associated  with bitcoin  and anyone doing this, should  be doing it at their own risk without wanting the government  fight for them in case there is scam, fault or complications with the transactions.

Each individual is directly responsible for his own policies in buying and selling cryptocurrencies. Of course, because the government does not act as a representative issuing cryptocurrencies and the government is not a supervisor, everyone is responsible and bears their own risk when engaging in trading and investing in crypto. Agree with you that the government will not fight for and accept if there is fraud, error, or transactional complications and all other forms of risk because they are not the person in charge.

Well, taking advantage of bitcoin's intrinsic anonymity is necessary. But, the question is why your government is doing it and the answer is that it's all to avoid unhealthy transactions, misuse and so on. that's why it's no wonder that regulations are tightened because they are unable to track bitcoin transactions.

My personal opinion is not the dominance that is seen there, but they want to know more about the technology that is in BTC and they only use their special rights to easily enter and monitor it.

Yes, it's true that every government will definitely tighten its regulations as cryptocurrency grows and develops, this aims to maintain the stability of each country. I don't think this step is wrong, considering that the Government does not prohibit its citizens from investing in cryptocurrency in any form, regulations are tightened with good intentions, as you mentioned the goal is to avoid abuse and unhealthy transactions.

[GxSTxV]

Banks to me are a high corrupted system at least in my country. Where Government gives them the authority to manipulate, steal, and use people's money without any investigation. When a bank goes bankrupt, it takes away all the money from the people who have accounts with them and without any refunds or repercussions for the bank.
I will give you a simple and known example for instance in my country, there was a politician who owned a bank. Many people invested their money in that bank trusting it with their savings for some annual returns. But one day that politician decided to steal all the money and escape to the United States, without facing any arrest or consequences. What's even more weird is that he was able to return months later as if nothing happened.

For this i don’t believe that banks generate money. Banks don't actually generate money instead they gain ownership over your money once you deposit it with them and use it as it’s their own money.

[dothebeats]

Banks to me are a high corrupted system at least in my country. Where Government gives them the authority to manipulate, steal, and use people's money without any investigation. When a bank goes bankrupt, it takes away all the money from the people who have accounts with them and without any refunds or repercussions for the bank.
I will give you a simple and known example for instance in my country, there was a politician who owned a bank. Many people invested their money in that bank trusting it with their savings for some annual returns. But one day that politician decided to steal all the money and escape to the United States, without facing any arrest or consequences. What's even more weird is that he was able to return months later as if nothing happened.

For this i don’t believe that banks generate money. Banks don't actually generate money instead they gain ownership over your money once you deposit it with them and use it as it’s their own money.

Another ironic thing about banks is how they are very strict when it comes to paying your credits on time and with the exact amount, but when they are the ones having problem (like system failure, loss of savings money due to their system being hacked and bankruptcy) you will have to wait for so long and most of the time they will not be accountable for your money.

[YUriy1991]

For this i don’t believe that banks generate money. Banks don't actually generate money instead they gain ownership over your money once you deposit it with them and use it as it’s their own money.

Interesting, but the truth is that banks played a role in creating credit money, which makes up most of the money circulating in the modern economy. They just they make entries in the ledger. Easy example, if we submit a loan of $ 1,000 and if it is approved they will only add $ 1,000 to our account balance as credit money that we can use instead of bringing all the cash to us. So, where do the benefits come from? It is clear from the Interest on Loans submitted by customers, the easiest thing to see as what the OP said is their Service Fees and these fees are also a source of income and are involved in investment and trade and this is also part of the bank's income.

[mamesso]

Every transaction related to banking will incur a fee because the Bank main goal is to print or generate income, usually conventional banks gain profits through two events, the first is spread-based income and the second is fee-based income. The simplest example is traders buying natural resources from the community or farmers and then selling them back to consumers, where do the profits come from?

The business run by the Bank is more or less like the example above. Banks use (collect) money from people who cannot yet use money or don't know how to use money, then the money that has been collected is used as loans to people who need money or companies. The Bank certainly charges a return fee (loan interest) depending on the percentage attached to the loan agreement.
Financial institutions are like parasites that slowly undermine the people, they set high interest rates on the borrowers of money and offer very little return for the people who save money there.

[tread93]

Financial institutions (banks) are responsible in handling financial issues, records, accounts and income of individuals, companies, churches and organizations. They respond promptly according to your demands on your accounts, they also have zero tolerance for fraud and are very security conscious, security intelligence and anti financial crime expertise but they've policies of not collecting dime from customers accounts yet banks are most wealthiest institutions on earth.

How do they make money?
* mortgage - using some billionaires account to buy housing properties and leasing them
* estate and lands with same patterns
* SMS alert charges
* Transfer charges
* Syphons dormant accounts or dead people accounts that are inactive with enough money in it.
* ATM and investment cards
* sales of currencies like dollar to naira
* preparation of international documents
* savings people's valuables like gold, certificate, court documents, WILLS, and so on.

This is what makes financial institutions very wealthy.

Makes you wish you owned your own bank right? Oh wait, that's what's bitcoin does! Now we just have to watch out for the bank robbers AKA scammers / con artists. I like how Gandalf says it best, "keep it secret, keep it safe"! And this is exactly what everyone needs to do with their PKs and wallets etc etc.

[slapper]

Every transaction related to banking will incur a fee because the Bank main goal is to print or generate income, usually conventional banks gain profits through two events, the first is spread-based income and the second is fee-based income. The simplest example is traders buying natural resources from the community or farmers and then selling them back to consumers, where do the profits come from?

The business run by the Bank is more or less like the example above. Banks use (collect) money from people who cannot yet use money or don't know how to use money, then the money that has been collected is used as loans to people who need money or companies. The Bank certainly charges a return fee (loan interest) depending on the percentage attached to the loan agreement.
Financial institutions are like parasites that slowly undermine the people, they set high interest rates on the borrowers of money and offer very little return for the people who save money there.

When it comes to money, banks are the real masterminds behind the scenes. I get your drift, but lets examine this more further. Obviously, their motivation is financial gain. Yes, but arent they all? To simply compare banks to traders is to miss the point entirely

Without banks, society might grind to a standstill due to the lack of necessary financial infrastructure. Their expertise lies in financial dealings such as loans and investments. Sure, companies make loans using depositors' money and earn interest that way, but isn't it preferable to keeping your money in a savings account at home?

Your next point is that they are parasites, which is fair. I find it a little severe. High loan rates are not created out of thin air, though. This is a strategic gamble. A bank is not a charity; it has to set aside money in case of losses. The rate of return on savings is another contentious issue. Bear in mind that with great power comes great responsibility.

[leonair]

Every transaction related to banking will incur a fee because the Bank main goal is to print or generate income, usually conventional banks gain profits through two events, the first is spread-based income and the second is fee-based income. The simplest example is traders buying natural resources from the community or farmers and then selling them back to consumers, where do the profits come from?

The business run by the Bank is more or less like the example above. Banks use (collect) money from people who cannot yet use money or don't know how to use money, then the money that has been collected is used as loans to people who need money or companies. The Bank certainly charges a return fee (loan interest) depending on the percentage attached to the loan agreement.
Financial institutions are like parasites that slowly undermine the people, they set high interest rates on the borrowers of money and offer very little return for the people who save money there.

The bank has a lot of profit in different ways.  Banks themselves are benefiting by earning high profits as well as providing many benefits to the people. But according to me bank generate most income from loan service and from credit/debit card and they have many other ways to generate income but customers don't suffer much for it. Everything is in one control and the bank and the customer all happily carry on with the transaction

[ChiBitCTy]

I would just like to add that Banks, the big ones, are corrupt as all hell.  JP Morgan/Chase, Wells Fargo, Bank of America..the worlds largest banks, are all corrupt crooks. 

Take a look at JP Morgan / Chase fraud violation tracker.  Since the year 2000, JP Morgan has had nearly 40 BILLION in fraud violations...and yet no one ever goes to jail.

If you use a bank, get an online account (like Ally, Capital one etc  Bankrate.com is a great place to view best current interest rates).  Now you'll also need a physical bank for ATM use, I recommend credit unions and very small "mom and pop" type banks, which are fewer and far between these days..but these two types of banks are decently legit...big banks, anything but. 

This is nearly 20 years of financial experience closely working with banks, so not coming out of my ass.