Brick and mortar banking, which refers to banking that takes place at physical headquarters, is becoming less and less common. Traditionally, banking has occurred on premise, with customers engaging in transactions face-to-face with tellers, and depositing or withdrawing physical funds.
Banks in the United States are unique in that they ooperate on both a federal and a state level. Up until 1925, there was no sepreation between commercial and investment banks, but after the establishment of the Federal Reserve System, central, commercial, and investment banks became separate entitities and operated under distinctly different regulations. In addition, credit unions were first established at the beginning of the 19th century becoming another branch of the banking industry.
The Great Depression changed the face of banking, and altered the public perception of what money actually is. Bank runs occurred frequently, meaning that banks would rapidly run out of cash because customers are attempting to withdraw their deposits fearing that their bank would fail.
Massive overhauls were put in to place under Franklin Roosevelt during the New Deal Period. Notable developments were the ratification of the Glass-Steagall Act of 1933 which separated banks into types according to their business practices, and the abandonment of the gold standard. in order to deal with deflation.
In the 1980s and 1990s, the banking industry did experience some deregulation that lasted up to the Late-2000s financial crisis. Up until the Late-2000s, banking was primarily conducted on premise, at physical brick and mortar institutions. It was easier for FDIC mandated institutions to regulate transactions, and to ensure that they had enough capital on hand to remain solvent.
In the wake of the financial crisis, many banks have transitioned operations from being brick and mortar to being virtual. This minimizes costs significantly, as banks don’t have to rent physical property, they can employ fewer people, and transactions can occur remotely and from anywhere, meaning that nobody has to commute to an actual bank location.
These new virtual banks could integrate with interactive voice response systems to ensure that banking transactions were accessible to all customers. For one reason or another, bank customers might not have access to online services. They could just call into an IVR, transfer funds, make payments, find about current and past balances, and even schedule deposits. IVRs could ease the transition from brick and mortar to virtual banks and make these type of systems accessible to everyone.