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Inventions

When was electronic banking invented?

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04/29/2009

In 1950, the Bank of America (then the largest bank in the world) asked SRI to assess the possibility of developing electronic computers that could take over the labor-intensive banking tasks of handling checks and balancing accounts. The creation of branch offices and the rapidly increasing number of checks being used by a growing clientele threatened to overwhelm the existing manual processing and record keeping. At that time, no large-scale electronic machine for any bank was under development -- existing computers were used mostly for scientific calculations. They were unreliable, and had extremely limited input and output capability. In spite of this, SRI's feasibility study, issued in May 1951, was sufficiently encouraging for the Bank of America to authorize a major multi-year development effort. We now take for granted the many ways that computers assist individuals and businesses. The 50-plus-year-old project briefly described here provided a vision of what business could expect from the application of data-processing machines, and illustrates how and why some of the key capabilities were invented, including bookkeeping, optical character recognition (OCR or scanning), and robotic document sorting. The automated teller machine (ATM) is the natural descendant of this work, and illustrates the progression away from paper checks toward all electronic banking.