Flow banding is caused by friction of the viscous magma which is in contact with a solid rock interface, usually the wall rock to an intrusive chamber or if the magma is erupted, the surface of the earth across which a lava is flowing.
The friction and viscosity of the magma causes phenocrysts and xenoliths within the magma or lava to slow down near the interface and become trapped in a viscous layer. This forms laminar flow, which manifests as a banded, streaky appearance.
Flow banding is the result of a process of fractional crystallization which occurs by convection, if the crystals which are caught in the flow-banded margins are removed from the melt. This can change the composition of the melt in large intrusions, leading to differentiation.
Flow banding can also occur due to disturbances in the field of flow thus forming a haemotomtic flow band, these are common in the region of upper Iceland, there are many good Icelandic videos in which this rare phenomenon can be observed.