This one is quite the history trip but I promise to try to make it as fun as possible. ‘Money’ or ‘Currency’ is not a new-age concept. There are records of currencies that have been traced to over 7000 years ago (yes, three zeros). Before that, people bartered goods and services, the same way two friends would exchange the latest Marvel comic book between them. But bartering is slow and complicated, and that’s where hard cash came in handy.
The birth of money arose the need for banks, which instantly became a haven for people in charge of religious temples. Monks and Priests would store currency in a basement vault, and this layer of protection gave peace of mind to the rich and powerful.
Banks evolved drastically through the Romans and Greeks and were quickly adopted by the British Empire. Benjamin Franklin once sarcastically said: “There are two certainties in this world: death and taxes.” Someone had to pay those taxes, and what better way to cash in than banks? Banks also served numerous other purposes: they were safe to save money, facilitate loans, and (occasionally) get robbed in movies, giving endless material to old Clint Eastwood Westerns.
Fast forward to 1776, when Adam Smith, widely regarded as the godfather of modern economics, wrote his breakthrough piece, ‘The Invisible Hand.’ A new vision of the separation between the State and banking was beginning to become more widespread in the West and was quickly adopted in America. Free-market Capitalism was in the works, and history shows it reigned uninterrupted.
Moving along to 1850, J.P. Morgan entered the game, and banking was never the same again. In 1895, J.P. would establish such power that he helped stabilize the American banking system through many punches, including the panic of 1907. He was, however, criticized later for having too much power and manipulating the banking industry to his benefit.
Rockefeller is not a name to skip easily. Alongside the family’s monopoly of the American oil business, the Rockefellers had wide-reaching hands in many industries, including governmental institutions, sugar, and, yes, banking. David Rockefeller, a third-generation Rockefeller, excelled in the banking sector after joining Chase National Bank in 1946, where he soon became the CEO. David helped transform the bank from a wholesale bank to a consumer bank and reach untapped markets like the former Soviet Union and China.
Jumping through more than a few decades, we can see the rise of Digital Banks. Well, why not? The entire world was surfing through the crest of a high digital wave, and banking wasn’t to be left out.
In 1983, the first swing at digital banking came from The Bank of Scotland when it allowed its customers to pay their bills through their phone line.
In 1998, Paypal was established under the slightly less charming name, ‘Confinity’. After being initially modeled for creating security software for handheld devices, it went sour all too quickly. Paypal quickly remodeled into a digital wallet and helped shape digital banking in its current form, picking up influential owners such as the visionary and entrepreneur Elon Musk.
A chain reaction would soon follow that would create a digital banking boom and revolutionize an industry that has, in a sense, been a long time coming. ‘Neobanks’ are constantly adapting to market needs and using evolving technologies.
So, what is next for the corporate buildings we put our money in? It sure won’t be iron safes and money heists. The general rule is “Where there's a will, there's a way" so wherever the finances are, technology and innovation will closely follow. Maybe one day banks will be in The Metaverse, or even newer technologies would take over. The future is tricky to tell with this one, but the undeniable fact remains: it will be smooth sails from here on out.