Banking evolution – How it all started
Banking has been around since forever. Surely, not banking in the form we know of nowadays, but the concept of banking in general. The banking industry has gone through many different changes and has evolved a lot to become one of the biggest industries in the world. With that being said, let me take you through the major events and developments in the history of banking.
It all started more than 2000 years ago, sounds crazy right? But actually, merchants used to give grain loans to farmers and traders who carried goods between cities. So basically, back then, necessities were used as money and exchange deals were made. This form of trade was documented by ancient Iraqi & Egyptian civilizations in inscriptions and writings, such as the Hammurabi code, dating back to 1772 BC.
After a while, with the development of transaction systems, merchants began to use rare metals such as gold & silver in buying and selling. Till that day, there’s a major financial market imbalance due to merchants’ need for debt in order to start or grow their projects and to find a safe place to keep their wealth.
That’s why the Greeks and romans resorted to the temples, as the priests were trustworthy people, who could keep their wealth and reassure them. They also created a new system for granting loans, while also accepting deposits and performing the change of money.
Before moving forward, let’s drop a very interesting fact about the origins of the word “bank” and where it first appeared. The word “bank” originally appeared in Venice; a word derived from the Italian word “banco”. Banco means “bench” that refers to the benches that European money lenders used to display coins of different countries on, for the purpose of lending or exchange. In 1407, the first bank was established in Venice, then later banks spread all over the world.
However, the enormous spread occurred in the 19th century, with the emergence of the industrial revolution in Europe. Businesses needed funds to get started, so there was always a demand for more capital. This need arose the presence of banks and prompted the opening of many branches in different regions.
Banks began to expand greatly whether in their numbers, products or the segments they serve, especially in the last 50 years with the emergence of credit cards, ATMs and internet banking. It became necessary for most people to have a bank account.
The future of banks is not yet clear due to the rapid technological development and discovery of digital currencies, which some people see as forming an economy parallel to the central economy in countries.
However, now we can say that, the understanding of banks is easier than ever. You don’t have to leave your house and wait in line to transfer money or apply for loans. Everything that banks offer can be done through online applications. P2P transfers, bill payments, and applying for loans can be just one click away!
All these features are offered through applications like Revolut in UK, N26 in Germany, and soon, Nexta in Egypt. If you want to learn more about Nexta and the features offered, check this website: https://www.getnexta.com/