Financial Innovation Through History (1/3)

Birth of Banking – From Barter to Banks

The role of banking is very significant in human history as it is one of the pivotal roles in progressing the development of economies, trades and societal structures.
We have come a long way from bartering – one of the earliest methods of trading where people exchange goods or services, to coins, banknotes and digital money.

Evolution of Banking

Barter System (Pre-2000 BCE) [1]
- Direct exchange of goods
- Temples used as early storage places
Early Modern Banking (1101-1600) [1]
- Italian city-states: the beginning of modern banking with money lenders and currency exchange
- Bills of exchange: used for international trade, leading to the development of credit.
Central Banks and Paper Currency (1601 – 1800)
- The first reported use of paper money was in China in the 17th century. [2]
- The first official stock exchange was the Amsterdam Stock Exchange in 1604. [3]
- In 1694 Bank of England issued currency and manage monetary policy. [4]
Industrial Revolution (1801 – 1900)
- Branch banking expands
- Commercial banking grows
Digital Revolution (1901 – 2000)
- Electronic banking and ATMs introduced
- Digital banking became mainstream
- Rise of FinTech and Blockchain technology

Sources