The role of banks has been, and continues to be, shaped by a number of mega-trends: the globalization of financial markets, the rise of non-bank competitors, the ongoing evolution and implementation of new technologies, and deregulation and disintermediation (i.e., the movement away from the middleman role played by banks between depositors and lenders). Ultimately, as a direct result of the aforementioned trends, many banks have decided to extend their business transactions across national boundaries in search of new business opportunities and higher profits. However, there remain a vast number of banks that, for one reason or another, have been reluctant to take their operations into the international market. These banks, though their reluctances can be justified to a degree, are making a huge mistake. A careful analysis of the progression of international banking through history, and the costs to benefit ratio for a bank to expand on their domestic operations, will reveal that operating internationally is no longer just an option for large domestic banks--it is a necessity.
International banking is the future; and any bank that does not realize this before it is too late is history.
INTERNATIONAL BANKING: A BRIEF HISTORY.
A brief look at the history of international banking shows that even throughout the ages, it has been important for banks to branch out into the international market. In the fourteenth and fifteenth centuries, Italian operated banks in England, like Bardi, Peruzzi, and Medici, were the largest business enterprises in the whole of Europe. In the following century, The Fuggers of Germany had branches set up in seven different European countries. From there the progression of the banking industry remained relatively static until the industrial revolution; at which time the banking industry started to grow again, along with most other industries in Europe and the newly...