When you have a bank account, you can typically use any branch of your bank to make deposits, withdrawals or otherwise. The reason you’re able to do this is because all of the branches belonging to your bank, through computer communication, are essentially “wired” together and have access to the same information though high-speed communication means. This can also be called a wire house.
In the example above, wire house doesn’t refer to the branch itself, but to the company (house), which organizes its many locations by providing them with the same level of access to information. Those old enough to remember the pre-computer era of banking realize the term is still a relatively new one. Prior to the ability to communicate via computer from bank to bank, no company could be called a wire house. If you wanted instant access to your funds, you’d visit the bank that was your home branch, since it had direct information about your bank balance.
When computers were first developed, they were massive machines not intended for home use. High-speed connections between different parts of a company or different branches of the same bank were common in businesses long before they were affordable for use at home. Only the biggest companies could afford the expense of being able to provide communication from office to office, and frequently these companies were brokerage firms. It thus became common to refer to a large brokerage firm as a wire house, as they were wired together so that the same information was available to every aspect of the firm.
The name stuck, even though we now see examples of “wired” companies in a variety of settings and it’s as common as air. You can visit or call a stockbroker at any location and receive current and the latest information on prices of stocks and drops in the market. You can even direct a broker to purchase or sell stock, which can often be done immediately, and you’re able to get this information online too.
The flow of information isn’t just between branches of a typical wire house company, but also comes from primary sources, like the different stock markets. High-speed communication also allows different companies to contact each other, such as two banks being in communication regarding withdrawals, written checks, or a bank being in communication with a grocery store when you use your ATM to shop. Any company that has branches where each branch is able to quickly retrieve information from a common source can technically be called a wire house, though the term has been most applied to brokerage firms.
