Going Back in History: How Banking and Financial Services Evolved

After covering the basics of financial literacy in our previous article “It’s 2022, why Are We still Lacking Financial Literacy?”, we cover the evolution of banking services in this part of the series.

25 years ago, your banker knew you personally (and you knew them). People would go to their local retail bank in order to deposit money into or withdraw money from their bank accounts; investors had their securities account with their bank and consulted with and/or called their investment adviser to buy and sell shares and securities.

Online Banking (from 1998-)

Then the internet came around. Between 1998-2000, many European banks introduced internet banking services. Logging in with their Account ID and PIN, customers were now able to withdraw money or effect bank transfers from their desktop PCs with internet connection, given they entered their TAN codes (Furrer & Dietrich, 2012). Banks started to thin out their branch network as less bank advisors were needed.

The first online brokers started to evolve, allowing investors to buy securities and other financial instruments from the comfort of their home. It was no longer necessary or even trendy to go through your investment advisor in order to make investments on the financial markets.

Mobile Banking (from 2008 -)

With the advent of smartphones and mobile apps, the mobile banking era began. Banks slowly and cautiously started implementing mobile banking apps, allowing their customers to make bank transfers and payment from anywhere at any time, just by a few taps on their smartphone. The global financial crisis in 2008 led to a general distrust in banks and the traditional financial system that grew with time. Investors start looking for purely online, cheaper, user-friendly brokers and banks. As a result, brokers with commission-free trading like Robin Hood in the US or eToro and deGiro in Europe flourish and grow.

While invented with Bitcoin in 2008, the new asset class of cryptocurrencies arises with the first large crypto boom in 2017. More and more people start to use mobile banking apps for their banking transactions and online brokers for their financial investment, many now use crypto-brokers or -exchanges to manage their crypto portfolio.

Mobile-First Banking / Crypto-Exchanges (2016-present)

Since around 2016, we are living in the world of “mobile-first banking”. Most websites and online services are used through users’ smartphones and mobile apps, pertaining to the financial industry where mobile banking apps are the predominant method users avail of to interact with their banks. The FinTech revolution has led to the success of “mobile-first banks” or and “challenger banks” like N26, Revolut or others that don’t have a single bank branch (Wittkamp 2020).

Fast-forward to 2022: Whether it is bank transactions, mobile payments, managing an investment portfolio or trading cryptocurrencies, a large part of the population manages their entire financial lives simply by using their smartphone (Wittkamp, 2020). The last time they saw their bank advisor was when they finally closed their expensive bank account in the outdated branch bank.

In the next and last part, we’ll get to the bottom of the question we asked ourselves at the beginning of this article series: Why is financial literacy more important than ever and how can we fill these gaps? Stay tuned.


Furrer, F., & Dietrich, A. (2012). Geschichte des Online-Banking: Vom Telebanking zu Mobile Banking. URL:

Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1-8.

OECD (2011). Measuring financial literacy: Questionnaire and guidance notes for conducting an internationally comparable survey of financial literacy. Periodical Measuring Financial Literacy: Questionnaire and Guidance Notes for conducting an Internationally Comparable Survey of Financial Literacy. URL: https://www.oecd.org/finance/financial-education/49319977.pdf

Wittkamp, B. (2020). Mobile Banking. In Köpfe der digitalen Finanzwelt (pp. 233-244). Springer Gabler, Wiesbaden.