As we progressed from using a barter system, where one commodity was exchanged for another, to using a currency to buy a commodity, a need aroused to have a central system of depositing money from where people could withdraw money as per their requirement. That place came to be known as a bank. Today these banks have now an intricate web of branches from where anyone can avail their services. Banking has made giant strides for making the life of a common man easier in every way possible.
As more and more people started holding an account with the banks, banks now had a huge surplus of money which then could be used by the bank to earn them more money. Thus, loans and FD’s came into existence. With loans, banks can now lend money to the needy and can accrue interest on it. This money can then be used by the banks to expand their services even more. This gave birth to a cycle of revenue generation which led to a flourishing banking sector.
Banks also became a catalyst for growth for many economies as their lending power was much greater as compared to other alternatives. Many economies like that of South Korea extensively rely upon their banking system to stem their growth. In India, people usually denote banks as a symbol of trust where their money will be protected and safeguarded by competent authorities. This shows how deeply rooted banks are in the ethos of a country.
As the times are progressing, today banks are adopting newer technologies that could help them reach new heights. Financial inclusion is now the new cornerstone on which the services of banks are anchored upon. Internet and the world wide Web now give people more access and control over their accounts. Small payments banks and small finance banks are the new norms as they don’t entail high costs as other big banks and can provide good and affordable banking services.
As years will pass, banks will again adapt to newer technology that is on the horizon and they will transform into something new, but the trust people have in the banking system for its unwavering service will keep this sector alive for years to come.