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The History Of Modern Banking, Explained By GIFs

It’s been quite a long road for banks!

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1. Medieval merchants trading like whoa:


Modern banking as we know it kicked off in medieval times — the 12th and 13th centuries to be exact — in Italy. Merchant houses, usually small, family-owned trading businesses, began to fund production and foreign trade of commodities like grain and wool in return for a portion of the profits.

2. Big banking families say heyyy and then byeee:

Michael White Productions / Via

In the 14th and 15th centuries, the Bardis, Peruzzis, and Medicis operated branches around Europe, trading commodities globally and profiting from currency exchange fees. They had tons of power in their prime, but lending and management failures caused them to go bankrupt.

3. Cash $$$ in London:

Paramount Pictures / Via

In the 17th and 18th centuries, the goldsmiths of London, who held wealthy patrons' gold and silver in their vaults, began to loan the funds out in the form of transferable paper money. In the 1690s, the Bank of England issued the first real banknotes, and by 1745, banknotes ranging from £20 to £1,000 were being printed.

4. FREEEDOMMM (and banks) for the U.S.:


The first central bank was established using the Bank of England as its model, but its charter was not renewed, because critics charged its practices were constraining economic development. Another was formed in 1816, but it also ceased operation. Commercial banks took root and, after 1800, grew rapidly in number and assets.

5. The battle between paper and gold:

Comedy Central / Via

During the Civil War, the U.S. government began to issue "greenbacks." Conservative "hard money" supporters were not fans of this decision, while "soft money" supporters applauded it. Eventually, people realized the value of paper money, and today we have dollar bills unbacked by gold.

6. Turn-of-the-century #Struggles:


During the Panic of 1907, stocks plummeted due to the collapse of the copper market and the fall of the Knickerbocker Trust, the nation's second-largest trust company. In response, the Federal Reserve was created in 1913 — and it remains the central banking system of the U.S. today.

7. #Struggles to #Winning:


The stock market crashed again in 1929, and people started pulling their money out of banks. In 1933, the president ordered all banks to close and worked to develop emergency aid. He told people it was safer to keep money in a bank than under their mattress, and when the banks reopened, people were ready to redeposit.

8. Tech, baby, tech:

DreamWorks / Via

The second half of the 20th century saw the rise of the ATM machine, debit cards, and MICR, the automated character recognition system used to process checks. The first credit card card company was also launched: the brainchild of a restaurant customer who forgot his wallet one night!

9. Hello, interwebs:


What happened as banking entered the 21st century? Two words: the internet. Banks began offering consumers the option of accessing their accounts online to check their balances, pay their credit card bills, and more. By 2009, 54 million U.S. households were accessing their finances from the comfort of their couches (or beds)!

And mobile for the win!


Now, people have the option of banking on the go with smartphone apps. Capital One's mobile app, for example, lets you pay your bills, deposit checks, locate nearby ATMs, and even create a pattern password so you can access your accounts with a few simple swipes. Now that's what we call MONEY. ;)

Brought to you by Capital One.

*This article is sponsored by Capital One. Capital One does not provide, endorse, or guarantee any third-party product, service, information, or recommendation listed above.