Chain Banking

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Chain banking involves three or more separate banks being controlled by a group of individuals with controlling interest, but not all owned by one company.

It started in the mid 1920s to maximize profit and offer more services to customers. It differs from group banking, a scenario that has several affiliates existing under a single holding company. It’s also different from branch banking, with several branches of a bank being owned by one institution.

An example would be a group of investors who own 60% of the controlling interest in Small Town Bank, Medium Town Bank, and Really Small Town Bank. This group has controlling interests, and can make changes to the banks, offering new promotions or discounts to customers.