Nothing, except perhaps economic immaturity, prevented the rise of financial institutions prior to the Medici. In fact, the Medici were relative latecomers to the financial industry in Florence, while the polity of Florence itself only established itself as a major Italian power in the fourteenth century (prior, the major commercial center in Tuscany had been Lucca, and besides, in its early phase Florence had to face fierce competition from both Pisa and Siena). In addition, the word "renaissance" itself, although certainly a useful little box for periodization, isn't really indicative of much. Trade and economic growth, in Italy, starts accelerating in the tenth century. Although it certainly peaks five-six centuries later, it's inaccurate to treat the renaissance as an unprecedented explosion of political and economic growth.

What the Medici are most notable for is their ability to successfully play off both politics and business to control the Florentine government. The process by which this happened is nonlinear and somewhat convoluted; in their early history, the Medici were just small landholders partaking in the very profitable wool trade. Their first loans were small: here and there a loan to the Counts Guidi (rivals of their own overlords, the Ubaldini) and a loan to the abbey of Camaldoli (a major stopping point over the Apennines into the Mugello). As the various branches begin to proliferate, and established themselves in the city of Florence, the natural economic progression wasn't in finance, but Foreign Exchange. Florentine goods, foremost among them wool, traveled down the River Arno to ports all over the Mediterranean. To buy and sell their goods abroad, tuscan merchants needed foreign currencies. And there was such a need for foreign exchange services that money-changers were not only one of the seven major guilds of the city (the Arti Maggiori) but the first to establish their own independent guildhall as early as 1202. A clever merchant could use arbitrage and price differences to his advantage, but an even more clever one would intervene directly in the market, buying, selling, and speculating. That's the field that Chiarissimi branch of the Medici decided to go into, leaving the ownership of the family's lands in the Mugello in the hands of Bonagiunti branch (the last reference to the Bonagiunti branch appear in 1345, where they are cited as holders of small municipal bonds, then nothing).

The third branch of the Medici, Averadi branch, are formally cited as being the first Medici investment bankers. But they were more akin to venture capitalists or a modern-day holding company partaking in numerous diversified activities. The Fili Averardi company, consisting of the five sons of Averardo Medici, apart from partaking in the commodities trade, are registered as landlords (perhaps absentee?) in Romagna, contractors to manage the mint in Ancona, owners of a warehouse in Treviso, and by some machination one brother (Francesco) was even appointed treasurer to the bishop of Liège in Belgium. However, by 1340 activity of the Fili Averardi company abruptly stops: A financial crisis had hit central Italy and ruined the larger Bardi, Peruzzi, and Acciaioli banking families. The Averadi felt more comfortable investing their money prudently and individually. Averardo de Bicci, father to Giovanni de Bicci who would oversee the dynasty's fastest period of ascent, was a second-generation member of this branch and decided to go into the less profitable but safer wool-trade rather than finance.

The real "Medici Bank" was founded by Vieri di Chiarissimo Medici. The Chiarissimi branch were so cemented in the money exchange business that they came to be called di Cambio, "the Exchangers". Vieri di Cambio made a name for himself as an aggressive foreign exchange speculator, a sort of fourteenth century George Soros. In 1348, Vieri moved into aggressive, if not downright predatory, lending. Unlike his relatives, who were often embroiled in local politics, Vieri remained focused on his leverage, volatility, and market exposure. After a particularly bad popular uprising in 1378, he was elevated to public office by his peers, and he had so few political enemies that he was kept in power even after the populist government that had called him to service collapsed.

Vieri retired in 1393, and his sons were unable to keep his financial empire together. But one of his most trusted employees and nephew, Giovanni de Bicci Medici, was rapidly growing his fortune. Taking advantage of Vieri's retirement to buy his uncle's Roman operation, Giovanni had managed to secure a portion of the Vatican's revenue in exchange for fronting money to various Popes and Anti-Popes. Like his mentor Vieri, Giovanni avoided public office, even after he moved the seat of his bank back to his native Florence in 1397. Also like Vieri, Giovanni found himself appointed to extremely important positions within Florence's government in spite of his disinterest (in fact, his political career would far surpass any other Medici). He quietly used these elevations to grow his business interests further. By the time his son Cosimo took the reins of the family enterprise, the Medici were in a position to control Florence both financially and politically even without holding public office. Through a combination of personal and business connections, Cosimo had his hand in almost every single guild and could influence their members accordingly. Cosimo's status as Florence's richest man made his council and advice much sought-after, and "gifts" drawn from his vast personal fortune allowed him to control members of the Consiglio dei Cento, named as a council but more akin to a modern bureaucracy administering public funds.

From then on, the Medici would be the de facto rulers of Florence. By the time Lorenzo de' Medici became patriarch, the bank would quietly go bust, but by then it was of little matter. The Medici were well on track to become sovereign lords.