According to the Merriam-Webster Dictionary the word “bank” comes from the Italian word “banca” meaning a table where money was exchanged. In early days of trading (meaning the early days of human settlements), people would exchange goods for goods directly. However, at some point, this became impracticable, especially when dealing with distant settlements. Thus, coins were introduced, which were usually made of gold and/or silver, therefore, their value was calculated based on its material. However, coins were different from place to place and people needed to go to the “banca” to exchange it. This process was very informal and usually performed by merchants, who used to travel a lot.

Then, people found that they needed a place to store their money, a safe place that is. And what safer place was there than the religious temples, guarded by the gods themselves?… Priests were soon lending money to people and robbery started to happen. Things became more serious during the Roman Empire, when buildings were designated especially for storing money and lending money became a common practice. Everyone could lend money and get it back, usually at very high rates. Those who engaged in such activities in small scales were called “usurers”.

During the Medieval Times and Renaissance, Italians consolidated their vocation for trading between themselves and the outside world. At the same time, Kings and Popes (and nobles, too) were increasingly resorting to debt to pay their grand projects. Back then, Italy was not a united country as it is today. The cities were independent and some of them, like Florence, were very rich. Using all their knowledge about trading, exchange of money, and lending, Florentine families, like Bardi and Peruzzi, founded the first official banks. Later, they were completely surpassed by the Medici, who founded what was soon the biggest bank in Europe. At this point, “usurers” were already looked down upon and the word became a bad name.

So, this is how banks of deposit (people needed to store money in a safe place) and exchange banks (people needed to change coins to pay for goods in other places) came to be. Banking activity came about with the necessity of people to get loans to pay for their projects in advance.

 
For more information about the history of banking:

• “The Evolution of Banking Over Time”, by Investopedia (an American point of view)
• “Bank – Historical Development”, by Britannica (a European point of view)