History Of Banking Essay

(Part 2)


A History of Banking:


No matter if the compensation of a hard day’s work is printed or electronically drafted, there is always a transfer from one source to another of the documentation in some fashion. It is thought that the idea of a bank began because people had no truly safe place to store their assets, be it money or valuables of other kinds. The bank then, started as an idea and has now become a staple of everyday life. Many times people swipe their ATM cards with little thought as to how important the role of a banking institution is in their lives. This report will examine the role of the bank and its history, which goes back centuries. The ways a bank has evolved to meet its customer’s needs over the years is remarkable. Finally, what lies ahead in the future of banking?

In the beginning there were possessions. People needed a way to safely store their possession and in many cases even borrow funds. According to HistoryWorld.net the first records of loans appeared in records in the 18th century. During the 4th century BC, the Greeks made banking more sophisticated. This is where loans, currency changes and the testing of coins for weight and purity take place (Gerson, Woolsey and Starbuck 2011). Then the Romans weigh in taking the Greek system and further evolving it. By the 2nd century AD public notaries are appointed to oversee debt payments (Gerson et al 2011). The banking systems growth suffered during the rise of Christianity and then began to be a more necessary organization by the 12th century AD. During the 13th century AD the Italians invented double-entry bookkeeping, a way that now risk and reward were recorded and could be seen by all parties (Gerson et al 2011).

With many governments of the world constantly warring among themselves, banking was a highly profitable career choice through the 16th century. The idea of the check began in the 16th century in the Mediterranean area and this helped to ease the transfer of wealth to whoever held the check. By the 17th century the ‘bill of exchange’ came into existence (Gerson et al 2011). Through the 17th century and into the 18th century banks become nationalized. The first of which, according to Historyworld.net, was in 1617 in the city of Venice Italy. The Banco Giro was established to “solve problems encountered by the Banco della Piazza di Rialto, giving out unsecured loans (Gerson et al 2011)”. The bank continued to evolve through the centuries to present day.

The evolution of the bank is constantly occurring, from trading in objects of wealth to gold and precious metals to the advent of credit cards and automated teller machines (ATM).
According to CreditCards.com the first cards were issued in the early 1900’s by oil companies and department stores to ensure customer loyalty. The first bank card was named ‘Charg-it’ in 1946 by a banker in Brooklyn (creditcards.com 2011). By 1949 the Diner’s Card was born. The holding of credit cards by many people led to the first modern automated teller machine which appeared around 1969 by Chemical Bank of New York, because people needed access to their funds at times when banks were not open to withdraw money (Boles 2011). The automated teller is much more than a place to withdraw money. A customer can check recent transactions, buy stamps, print mini-statements and make deposits. The evolution of automated tellers eventually led to online banking, which is growing rapidly in popularity. In the present day banking customers can make transactions using their smartphones. Yes there is an app for that. The future of banking looks very bright indeed and the ease of access to services has improved greatly over the years.

The future of banking is possibly going to seem like something out of a science fiction movie. There has been talk for many years over of replacing debit and credit cards with a microchip embedded under the skin. The microchip is about the size of a grain of rice and the technology is already being used in some cards. Just tap your card on the reader, no swiping necessary, and you are on your way. In 2004 a VIP club in Barcelona Spain called VIP Baja Beach Club began offering the clubbers an alternative to carrying cash. For 125 Euros about 150 U.S. dollars the club will implant a microchip under the skin of the patron. The chip transmits a radio frequency that tracks the patron’s drink orders and bills the customer monthly. An article on BBCnews.com explains the chip as follows;


With many loyalty cards being replaced with an app on any smartphone the next logical step is to replace debit and credit cards with such apps. This may be more feasible than the implanted chip since there seems to be a large number of people that see the chip as having religious and invasive properties. Currently there is an app called tabbed-out that allows the customer of participating restaurants the ability to follow charges being applied to the customer’s check. Then at the end of the meal the customer simply waves the phone near a scanner and the meal is charged to a debit or credit account. Creditnet.com explains the app as follows;

Major cell phone companies AT&T, Verizon and T-Mobile recently combined to begin the rollout of a smartphone payment system. It allows consumers to make purchases by waving their smartphone, which will be implanted with an RFID chip, in front of a wireless scanner that will charge their credit or debit card for the sale (Lee 2010).

The history of banking has been evolving continually through the centuries. The bank started as a simple solution to simple problems and has become a staple of everyday life. Without banks many countries would look quite different from what they are today. As patrons of the bank in our modern times, consumers demand more and more instant service. The evolution of the bank has changed some from the need for faster access to the funds of customers to currently seeking ways to increase the access and speed of banking to meet the more advanced needs of today’s savvy customer. The bank, being centuries old, is constantly growing and continues to evolve into the institution that customers demand. The bank is a cornerstone in every civilized society and has been for many hundreds of years. The sky really is the limit for the future of banking with all the modern technology available and continued improvements to the internet and other advances. This student certainly looks forward to observing the future of banking because the history is an amazing tale that has continually evolved with the people they serve.


Works Cited:


Gerson, Ben Woolsey and Emily Starbuck. “The History of Credit Cards.” Credit Cards – Compare Credit Card Offers at CreditCards.com. Web. 27 Nov. 2011.

“HISTORY OF BANKING.” HistoryWorld – History and Timelines. Web. 27 Nov. 2011. .
Boles, Kelley. “The History of the ATM Card | EHow.com.” EHow | How to Videos, Articles & More – Discover the Expert in You. | EHow.com. Web. 28 Nov. 2011.

“BBC NEWS | Technology | Barcelona Clubbers Get Chipped.” BBC News – Home. Web. 28 Nov. 2011.

“Smartphones May Soon Replace Credit Cards – BusinessWeek.” Businessweek – Business News, Stock Market & Financial Advice. Web. 28 Nov. 2011.

Lee, Sam. “New Smartphone App Aims to Replace Credit Cards at Restaurants.” Credit Card Offers, Bad Credit Repair & Credit Services – Creditnet.com. Web. 28 Nov. 2011.



History Of Banking