We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is the Banking Industry?

Jessica Ellis
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

The banking industry is an enormous sector of business and finance that has existed in human civilization in some form for thousands of years. In the modern world, the banking industry plays a large part in financial dealings, as it is a major and popular means for investing, borrowing, and storing money. Banks exist all over the world, and are usually heavily regulated by world governments in order to prevent corruption and protect the money of the general public.

Though there is some evidence of a banking industry in ancient Greece and throughout other early civilizations, the Middle East and Asia are believed to have played an important part of the development of a banking industry. The word “check” derives from an old Arabic word for a promise of payment on delivery, and historical records show some evidence of an international banking trade between Islamic nations and China as early as the 9th century.

Many historians trace the foundations of modern banking to 14th century Italy, where wealthy Italian families established banks for the lending and investing of money on trade and commerce. Banks sprang up throughout Europe during the following centuries, concentrating in the great ports of the old world where commerce was a part of daily life. With the shift from precious metal currency to fiat money systems, the banking industry was less limited by finite resources and could expand ever further. The development of computer technology also playing a critical part in creating a global industry, since users were no longer limited by the need to physically visit a bank to manage transactions.

The banking industry provides clients with a variety of services and options. The most basic function of a bank is to provide customers with a safe, guaranteed record of their accumulated money, usually done through a checking account that can be easily accessed for withdrawals and deposits. Banks also provide savings accounts, which are also easily accessed but provide a slightly higher interest rate for funds. For many people, involvement with the banking industry is limited to these two basic accounts, but this is only a bare minimum of what the industry offers.

Banks play a major part in the investing and loaning of money. Most banks can use the funds deposited in accounts to loan out money or make investments; this practice allows a constant flow of lending and borrowing that keeps money circulating throughout the economy. Loans that many banks offer include commercial loans, property loans, vehicle loans, and lines of credit. Investment services offered by many banks include retirement, certificate of deposit (CD), and money market accounts.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Jessica Ellis
By Jessica Ellis
With a B.A. in theater from UCLA and a graduate degree in screenwriting from the American Film Institute, Jessica Ellis brings a unique perspective to her work as a writer for SmartCapitalMind. While passionate about drama and film, Jessica enjoys learning and writing about a wide range of topics, creating content that is both informative and engaging for readers.
Discussion Comments
By AnswerMan — On Jan 23, 2015

One thing I find fascinating about the banking industry is that money is treated exactly like any other product made by any other industry. I might talk about my factory producing 12,000 tires today and my banker friend may talk about his bank loaning out 12 million dollars last week. It's the same conversation. Instead of hamburgers or t-shirts, his company deals in money.

Until all of those money lending scandals happened a few decades ago, I didn't realize that banks could actually run out of money or go out of business. The government can only do so much to protect banks or their members. I belonged to a bank one time that got bought out by another bank without much warning. The new bank had to spend a lot of its own money changing out everything left behind by the old bank.

By Cageybird — On Jan 22, 2015

When I was growing up, I didn't realize my parents' local bank was actually part of a much larger banking industry. I just thought they were a giant safe that kept everybody's personal money protected, but they didn't actually make any money of their own. It was only when I became an adult that I realized banking was a business, and banks had all sorts of ways to earn income.

Jessica Ellis
Jessica Ellis
With a B.A. in theater from UCLA and a graduate degree in screenwriting from the American Film Institute, Jessica Ellis...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.