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Banks' Big Upgrade: Meet Real-Time Processing

Soulskill posted more than 3 years ago | from the we'll-probably-arrive-at-the-singularity-to-make-a-buck dept.

The Almighty Buck 89

CWmike writes "It has been years since the banking industry made any large investments in core IT systems, but some of the largest financial services firms in the U.S. are now in the midst of rolling out multi-million dollar projects, say industry experts. About a decade ago, they began replacing decades-old Cobol-based core systems, with open, Web-enabled apps. Now, they are spending more than $100,000,000 to replace aging systems, converting to real-time mobile applications for retail services such as savings and checking accounts and lending systems. The idea behind going real-time: Grab more business — and money — from customers. 'Five of the top 20 banks are engaged in some sort of core banking replacement and we expect to see another three or four in next 12 months,' said Fiaz Sindhu, who leads Accenture's North American core banking practice. 'They're looking at those upgrades as a path to growth.'"

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competition (4, Funny)

cdibbs (1979044) | more than 3 years ago | (#36780266)

... with Bitcoin.

The banks clearly need more money (1)

Anonymous Coward | more than 3 years ago | (#36780288)

I hope the banks get all the money they need to stay afloat.

Evil (0)

Anonymous Coward | more than 3 years ago | (#36780290)

Banks == Evil.

They nearly destroyed the entire world financial system.

Don't ever borrow money, unless it's for a car or for a mortgage. Even then, make sure you buy something well within your means to pay. Ideally, pay cash for everything and don't even use banks - they are not productive and leach off of us, the productive members of society who create wealth.

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36780362)

You are aware, I trust, that in no small part modern society was built due to banks extending credit.

Re:Evil (1, Troll)

flaming error (1041742) | more than 3 years ago | (#36780584)

Modern society was built by modern builders. They could have done their job fine without banks. To the extent banks are needed, it is only because they have rigged the system.

Fractional reserve banks are parasites. They leech wealth away from their customers, and when that's not enough, they leech it away from taxpayers, and when that's not enough, they leech it away from third world peasants (a group that, thanks to these banks, may well include most Americans within twenty years).

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36780982)

Here we go with a Libertarian and his imaginary history and imaginary economic system.

Where do you suppose the money came from to pay for mercenary armies in late Medieval and Early Modern Europe? Where do you suppose the money for the Industrial Revolution came from. At the best of times there were damned few people with the ready cash to build a large factory.

Banks are nothing new, and even in Roman times you had money lenders willing to extend credit with interest.

Re:Evil (0)

Anonymous Coward | more than 3 years ago | (#36781078)

While I am not a Libertarian, GP is correct. Fractional Reserve banks and the Fed need to go away. Are you even famaliar with the destruction of the IMF?

As far as paying mercnary armies, the money did not come from banks, it came from taxing the population. And most of the money for the industrail revolution came from private inverstors rather than banks.

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36781462)

Read your history. Venitian bankers (probably the first modern bankers) made money hand over fist financing armies. They also funded trade and exploration.

Re:Evil (0)

flaming error (1041742) | more than 3 years ago | (#36781524)

A MightyMartian once said "You can either debate what I say, or you can just imagine my statements and then respond to those."

Sage words.

Re:Evil (1)

Roachie (2180772) | more than 3 years ago | (#36783062)

No, I think you misunderstand there is a difference between simply lending at interest and fractional reserve banking.

There is nothing anti-Libertarian about banking and lending. However fractional reserve banking, that is, creating the money by the process of lending, is a fraud.

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36787312)

Money is inherently an agreement between two parties to create a means of exchange. Do you think the gold standard somehow represents in any better way that means of exchange? Gold, beyond its industrial uses, is simply a different kind of placemarker. Beyond that, why shouldn't a currency be based on the accumulated value of economic input? Why would you base it on a substance that in virtually no way reflects the value of production in a nation?

Re:Evil (1)

BitZtream (692029) | more than 3 years ago | (#36787924)

And you utterly fail to get it.

Gold has value on its own. Gold has use outside of currency, which means its value is relatively stable, its rarity means you don't need as much of it to have a valuable amount. Society can completely collapse, and gold will still have value as it has direct uses.

Fractional reserve fraud works because you're printing money from thin air. It only has value until the moment people decide it no longer has value. Its giving away your gold, multiple times.

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36788492)

I do get it. Gold's value beyond manufacturing and industrial uses is simply an agreed upon amount. It is not magically imbued as you think it is. And I ask again, why should a currency's value not reflect the domestic production?

Re:Evil (1)

peragrin (659227) | more than 3 years ago | (#36781034)

HAHAHAHAHAHAHAHAHHAHA

Where does a builder, manufacturer, inventor, get the resources needed to build, or design?

Some one has to loan you the stuff you need to get started. then you build, and you build it better/cheaper than expected. you sell it make money and pay back your loan. Whether the loan was financial or material I can guarantee you had to borrow something from someone else to build. Pretty much the only thing you can build 100% on your own with no help what so ever is fire. After that you need tools, tools mean resources to build the tools, etc. Along that way you will need the help of others, that help comes with a price, a repayment. even if it means you help them later it is still repayment.

Try it name one thing other than fire you can build without involve others in any way shape or form.

Re:Evil (1)

BitZtream (692029) | more than 3 years ago | (#36787972)

Food and my home are the first two things that come to mind, you know, the essentials.

Don't get me wrong, I'd much rather fuck around on the Internet and read slashdot from within my nice airconditioned house and buy my food at the market, but I most certainly CAN do those things myself without anyone elses support, it'd just not be nearly as easy.

Ignoring all that, no one has to loan me anything to get started, I can barter for it with goods I already have collected myself. I don't have to take out a loan, I can choose to get the money first and buy it out right rather than have to pay someone extra for the privilege of getting it early.

By your definition, nothing can be built on your own, everything comes from somewhere else, which is a logical fallacy naturally. You really can't even build fire, its a chemical reaction, you have to have the resources there first.

Lets name some things I've bought on my own:

My 3 cars.
My boat.
My electronics/pcs/entertainment stuffs

Uhm, pretty much everything EXCEPT my house I bought without 'borrowing' anything. The difference is, I live within my means, you don't, and you don't even understand what its like to do so.

Re:Evil (1)

peragrin (659227) | more than 3 years ago | (#36788668)

Boy are you stupid, even if you paid cash for your cars that doesn't mean the dealership did, the contractor on your house took out loans for the materials, etc

Some where and most likely several some where's along the line from trees to iron ore to rocks some one borrowed money from banks to give themselves a temporary push so they could make more money. Just because you don't doesn't mean someone else didn't.

I live within my means. That means I can't buy a house. It is okay my choice. However my business functions by providing short term loans in the form of materials to

Re:Evil (1)

Colin Smith (2679) | more than 3 years ago | (#36780828)

due to

Really? It wouldn't have happened? Bankers created civilisation?

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36780934)

Wow, where did I say that? You can either debate what I say, or you can just imagine my statements and then respond to those. I'm sure the latter would be easier for you.

Re:Evil (1)

Hatta (162192) | more than 3 years ago | (#36781194)

I am aware that bankers take credit (no pun intended) for such, but that's what sociopaths do.

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36781342)

Take credit for what? Banks extend credit. Bankers work for banks and do the actual extending of credit. The concept of loaning money and paying back over a long period with interest was key to everything from marching armies into battle to building railways and factories.

I'm not defending all the actions of bankers, but good, bad or ugly, the society we live in with all the amenities produced over the last three or four hundred years is based on the extending of credit.

Re:Evil (0)

beppu (32422) | more than 3 years ago | (#36781686)

USURY is a deceptive way of enslaving people without them realizing it until it's too late. It is morally indefensible just as slavery is morally indefensible, and I'm not sure why you're trying.

The curious ones out there should do a little research on how those who practiced usury used to be punished. This should give people an idea of the SERIOUSNESS of this injustice.

Usura Contra Naturam [youtube.com] (by Ezra Pound [dissident-net.info] )

Re:Evil (1)

MightyMartian (840721) | more than 3 years ago | (#36781882)

So you tell me how you finance a factory without borrowing money?

Re:Evil (1)

BitZtream (692029) | more than 3 years ago | (#36788016)

Save up the money in advance from doing other work?

Its not hard.

But thats not what you mean.

You want to build a factory tomorrow without waiting or doing work to get the resources to build the factory yourself. You want someone else to pay to build your idea without you actually having to do anything buy sigh a piece of paper saying you'll agree to pay the money back ...

Simply put, you are the exact type of person that banks shouldn't loan money too.

Re:Evil (0)

Anonymous Coward | more than 3 years ago | (#36783478)

Enslavement to what exactly? Modern society? Shall we move back into the forest and forage like the rest of the animal kingdom? There is inherent risk involved with lending capital to anyone should they not be able or willing to pay it back. Which is one of the reasons why there is interest. In the real world, you can either pay rent or you can purchase your own home. No stranger is likely going to provide you with the means to do either and this isn't "Star Trek" so we can't just go around replicating shit.
Your naivety with the whole black/white concept of morality is charming, but reeks of self-righteousness and has no practical or reasonable place in a useful discussion.

Re:Evil (2, Insightful)

h4rr4r (612664) | more than 3 years ago | (#36780504)

If you have to borrow money for a car, you are spending too much on that car.

Re:Evil (1)

BigFire (13822) | more than 3 years ago | (#36780562)

Which is the reason the last car I bought, I mostly bought with a check. (I charged as much as the car dealer is willing to accept on the credit card to get cash back from the card, but it is against my religion to pay interest on the credit card. So that is paid off the next week).

Re:Evil (1)

h4rr4r (612664) | more than 3 years ago | (#36780610)

I just did the same. I paid the credit card off within the grace period as well. I am not religious, but I do not pay interest if I can avoid it in anyway.

Re:Evil (1)

flaming error (1041742) | more than 3 years ago | (#36780742)

For people of meager means it's more complicated than that, but borrowing from a commercial bank should definitely be avoided.

Re:Evil (1)

Jah-Wren Ryel (80510) | more than 3 years ago | (#36783286)

For people of meager means it's more complicated than that,

Indeed. it's easy to be all Ayn Rand when you've got the luxury of money in the bank. Not everyone is so fortunate.

if you have a job but no car, then you can choose to either be unemployed with no income or employed with some of your income going towards interest on a car loan.

Re:Car (1)

TaoPhoenix (980487) | more than 3 years ago | (#36781994)

Nah, don't go all hardline.

When you're at Cash Zero and you need a $4,000 used auto, you borrow it. But then recognize how evil the loan is and crush yourself to pay it off ASAP. I did mine with a Credit Card and not a fixed payment because some months you don't have all $300 for a payment.

Wooh-hoo, realtime, mobile interest rates! (1)

Jah-Wren Ryel (80510) | more than 3 years ago | (#36780322)

The idea behind going real-time: Grab more business â" and money â" from customers.

Yield-management pricing techniques, like airplane tickets, for everything else in your life.

Just download this handy android banking app that also reports your location data. When you walk by a high-end furniture store it will pop-up a teaser interest rate for any credit card purchases in the next hour.

I can't wait!!!

Better banking with twice the fees (0)

Anonymous Coward | more than 3 years ago | (#36780334)

in half the time.

snail pace of paypal transfer (1)

Lead Butthead (321013) | more than 3 years ago | (#36780350)

considering everything is just magnetic ink these days, can someone please explain why is it that paypal transfers still takes a week+ to show up in bank account?

Re:snail pace of paypal transfer (1)

nedlohs (1335013) | more than 3 years ago | (#36780356)

Because paypal lies to collect interest for as long as possible, which given interests rates are close to 0% is fair enough?

Re:snail pace of paypal transfer (1)

sakdoctor (1087155) | more than 3 years ago | (#36780358)

So paypal can get interest on your money.

Re:snail pace of paypal transfer (1)

MightyMartian (840721) | more than 3 years ago | (#36780372)

Because PayPal sucks?

Re:snail pace of paypal transfer (1)

ottothecow (600101) | more than 3 years ago | (#36780414)

ACH transfers between banks still take 3 days (some banks offer "express" transfers that complete in one business day...but they usually have something like a $1000 limit).

Still seems odd that my Amex charges show up in my account minutes after I buy something...but my transfer from checking to savings (at another bank) or my brokerage takes 3 days.

Re:snail pace of paypal transfer (1)

h4rr4r (612664) | more than 3 years ago | (#36780524)

Of course. When they are expecting to be paid that is going to be instant. When they can sit on the money for a few days and make interest at your expense they will do that.

Re:snail pace of paypal transfer (1)

afidel (530433) | more than 3 years ago | (#36780876)

No, they don't. The fed clearing house for ACH payments has I believe a 4 hour SLA. Now if the bank on either end takes an additional day to batch process the results that's their problem. I guess that's kind of the point of the article though, instead of doing one batch run at night the banks are going to doing what most other sane businesses do today which is real time processing. Interestingly electronic check images from vendors almost always process the next day for this very reason, the submit them to the clearing house and they get processed that night.

Re:snail pace of paypal transfer (1)

nospam007 (722110) | more than 3 years ago | (#36780878)

But now they'll spend a hundred million!

They'll fix everything with that amount!
With that money you could cool the tents in Afganistan for almost 2 days or pay the yearly bonus of a CEO or 2.

Re:snail pace of paypal transfer (1)

BitZtream (692029) | more than 3 years ago | (#36788074)

ACH transfers take less than 24 hours, they all clear the day they are put in. There is no delay. Within 24 hours of the start EVERYONE knows the completion status, thats the advantage of it being controlled by the fed so banks can't dick with you.

Anyone who says it takes longer is doing it to gain interest from your money before they give it to you. Which is exactly what paypal does. The longer delays you see are because its profitable for them, the person who has the money holds onto it as long as possible to gain interest. Your AMEX on the other hand shows up as soon as possible so they get paid as soon as possible, or depending on the card, the sooner they can start interest collection.

Re:snail pace of paypal transfer (0)

Anonymous Coward | more than 3 years ago | (#36780844)

They have 3 times the customers of BOA, so they win.

Re:snail pace of paypal transfer (0)

Anonymous Coward | more than 3 years ago | (#36780390)

The do their deposits in blocks, so there is only one fee a week(zero if you spend it right away.).
--
I aM So Meta, Even This Acronym.

Re:snail pace of paypal transfer (1)

Anonymous Coward | more than 3 years ago | (#36780804)

All banks paypal included use the ACH system and clear checks through the slowest banks and clearing houses available to get more interest. It's an old business model that's been around for ever and will eventually be replaced by real-time systems and a bunch of other possibly scuzzy fee based approaches.

cheap hookers (0)

Anonymous Coward | more than 3 years ago | (#36780402)

Real time processing will lower prices for hookers. This is what I call progress.

And yet I bet they still hold our checks... (3, Insightful)

paulsnx2 (453081) | more than 3 years ago | (#36780420)

None of this should be taken as meaning they should not modernize. It is just that they have taken this long to realize that they might make more money by being fast than by being slow. I expect they have figured out how to be either, depending on how it benefits them.

Apples, oranges, confusion, and enlightenment (5, Informative)

quietwalker (969769) | more than 3 years ago | (#36780522)

I currently write financial software targeted at small and mid-sized banks. The article was ... confused, so, let me try to clear it up a bit:

In the computing world, when you say you're going to replace your core systems, you're talking about replacing either the main software or hardware that your systems run on - or both. In the banking world, when you say 'core system' (or 'host system'), you're talking about the software package being used to store your customer's account data, such as Fiserve or Miser.

The article confusingly references both types of changes and appeared to treat them interchangeably.

Similarly, the phrase 'realtime' has a loaded meaning in the banking world. Outside of the banking world, 'realtime' means 'instantaneous', such as 'realtime rendering'. Inside the banking world, realtime means that actions (such as transfers) are submitted directly against the core system, as opposed to a proxying system which determines rates ($/day, max $, etc), fees, and tries to keep track of the active balance vs. ledger balance. The alternative to 'realtime' is 'batch' - where everything is performed in one fell swoop at the end of a day - when you reconcile the day's transactions.

Some transactions - such as inter-bank account to account transfers can usually be handled in 'realtime' even if the core doesn't support it. The necessary proxy can know everything about that bank's transactions, and can guarantee the availability of funds, so it's allowed. External transfers can't be though. Thus the separation between available balance and ledger balance. You can see this on credit card systems too; your payment may show up on the site as being verified, but not yet applied. In fact, with only few exceptions, when money is sent from one location to another, the actual movement is not finalized for a day or two. Both sides make note of it, so funds are made available, but it can be cancelled or reversed at any point in time before that.

In any case in the banking world, mobile or web (or even atm and point-of-sale teller terminals) don't care much about whether the backend core is in realtime or batch mode. It has nothing to do whatsoever with that functionality. Those are just pieces of software that hook into the core - and the core (or adapters for it) must support that functionality.

Whew! It was hard to read that article with the mixing of those definitions and a base misunderstanding of their purposes.

Re:Apples, oranges, confusion, and enlightenment (1)

BigFire (13822) | more than 3 years ago | (#36780594)

You don't actually expect them to know this? We still have 27 years until the world really comes to end.

Re:Apples, oranges, confusion, and enlightenment (1)

TheGratefulNet (143330) | more than 3 years ago | (#36780668)

mod parent up.

I learned more from that one post that I did in my entire time in reform school. er, I mean, high school.

(seriously, that post was quite informative. appreciate the inside view, we never get to see that.)

Re:Apples, oranges, confusion, and enlightenment (1)

Nerdfest (867930) | more than 3 years ago | (#36781350)

It's a hard change for them to make as a very large percentage of the old mainframe folks just don't consider anything but the batch approach. I don't know the number of times I've tried to explain the concept of queue based 'as soon as possible' processing or some other non-batch approach to those that grew up in the lameframe/COBOL world. I hope they're taking the opportunity to decouple things and rewrite things in a more maintainable manner. Those old COBOL systems have generally turned into monolithic nightmares of spaghetti code. Even determining what they're really supposed to be doing in the code must be an epic task.

Re:Apples, oranges, confusion, and enlightenment (2, Insightful)

Anonymous Coward | more than 3 years ago | (#36782130)

Sorry mate:

It's a hard change for them to make as a very large percentage of the old mainframe folks just don't consider anything but the batch approach.

The old mainframe folks are likely employed doing the sort of work they have done for longer than you have been alive. They know from experience what works and what does not. The batch approach is reliable, understood and suitable for the problem they have been tasked to solve.

I don't know the number of times I've tried to explain the concept of queue based 'as soon as possible' processing or some other non-batch approach to those that grew up in the lameframe/COBOL world.

I would like to hear what the mainframe programmers thought when they were told that everything they have been doing for the past thirty years is wrong by a Slashdotter that uses the term "lameframes".

I hope they're taking the opportunity to decouple things and rewrite things in a more maintainable manner.

Batch processing is all about decoupling, much more so than a queue based 'as soon as possible' system that fires off new processing as quick as it can.

Those old COBOL systems have generally turned into monolithic nightmares of spaghetti code.

No more so than brand new systems that were maintaned by poor programmers.

Even determining what they're really supposed to be doing in the code must be an epic task.

No more so than brand new systems that resulted from poorly-managed projects with undocumented requirements and business rules.

Re:Apples, oranges, confusion, and enlightenment (2)

cyber-vandal (148830) | more than 3 years ago | (#36783692)

The mainframe hasn't been all batch since about 1973 when CICS was released and I've worked in several places that used MQSeries. You must have worked at some odd places. I hear you on the spaghetti code front, but if any of the systems written now survives 30 years I bet they'll be just as bad.

Re:Apples, oranges, confusion, and enlightenment (1)

some-old-geek (1329305) | more than 3 years ago | (#36785292)

CICS dates back to 1998, see the recently produced history of CICS page [ibm.com] . CICS does POX, REST, and SOAP, in addition to MQ, so integration with the tried and true can be done and you can migrate to whatever you want on either side of the interface. Boring, I know. We are talking about banking, remember, not Facebook or Twitter.

Re:Apples, oranges, confusion, and enlightenment (1)

some-old-geek (1329305) | more than 3 years ago | (#36785306)

That's 1968, duh.

Re:Apples, oranges, confusion, and enlightenment (1)

Nerdfest (867930) | more than 3 years ago | (#36786340)

It's not about the tools, it's about the attitude and approach. As someone else commented here, "they know what works and what doesn't". I've found that's not true. They will stick with a batch approach even for things are are quite clearly better using MQ or some other tool. I think it's quite funny that Grace Hopper, the inventor of COBOL said something like "The worst phrase you want to hear is that's the way we've always done it". Of course, perhaps that's just the attitude in the places I've worked.

Re:Apples, oranges, confusion, and enlightenment (1)

cyber-vandal (148830) | more than 3 years ago | (#36791672)

I'm an ex-COBOL man myself and although I have come across "that's the way we've always done it", the majority of places (13 I think) that I worked in wanted to try new stuff as much as possible, especially after Y2K. I never worked anywhere where there wasn't online terminal based software where a batch approach would be impossible to do and the last place I worked had a website that used MQSeries to get information from the CICS backend.

Speaking personally I've gone from COBOL to VBA to C# and ASP.NET at the grand old age of 40 without too much trouble, and although some people might pretend that there's some similarities, there really is no comparison beyond standard language features between batch and CICS COBOL and web development.

Re:Apples, oranges, confusion, and enlightenment (1)

jschlesinger (410266) | more than 2 years ago | (#36825402)

CICS went generally available in 1969, not 1973. It did move from Palo Alto to Hursley, UK around 1973 though.

In any case, retail banks mainly used IMS rather than CICS, which was more dominant in utilities (it was first developed at Chicago Power and Light) and insurance.

The retail banking IMS systems were mainly written in assembler not COBOL. In IMS PL/1 was as likely to be used as COBOL.

Re:Apples, oranges, confusion, and enlightenment (0)

Anonymous Coward | more than 3 years ago | (#36781636)

The article was ... confused, ...

It certainly was. The REAL agenda actually seemed to be to assert that the banks were outsourcing more and more of their core business processing to overseas companies such as InfoSys.

Outsourced banking IT isn't new - I worked in a banking company with nary an IBM box in sight. Our bank accounts were handled by a mainframe in Michigan and our mortgages were handled by a mainframe at a company I used to work for. Our IT department primarily interfaced these systems to the in-house server farm and the internal user base.

So the only real change is that more of these functions are no longer done by US-based service companies.

This is not new (1)

QuantumRiff (120817) | more than 3 years ago | (#36780548)

I've been able to do a transaction, and see it deposited/deducted from my account in less than a second. And have been able to since about 1997, when I started online banking.. But I guess that's another reason credit unions rock.

Now if only I could figure out why Visa insists on holding CC transactions for 3 days..

Re:This is not new (1)

geekoid (135745) | more than 3 years ago | (#36781184)

You might want to call you bank and ask if that money is immediately available. Yeah, it shows up right away, but when does the money really move? I'll wager at about 2 AM in the morning.

Re:This is not new (1)

darth dickinson (169021) | more than 3 years ago | (#36781852)

Can't speak to the parent's credit union, but at my small CU - yes, the funds are immediately available. I can have a $100 balance, deposit a $500 check, and walk right outside and withdraw $300 from the ATM.

Re:This is not new (2)

scottbomb (1290580) | more than 3 years ago | (#36781984)

It's not because the money is actually available. It still needs to snake it's way through the Federal ACH. The bank trusts the that the check is good and the $300 you leave with is more like a loan. Try to do that with a larger amount and you may have a problem. For example, my bank will let me walk out with a few hundred after depositing a check but I once had to wait almost a week for a $2500 check from an insurance company to clear before they would let me use that money.

Re:This is not new (1)

jroysdon (201893) | more than 3 years ago | (#36782896)

That's typically if you do it via ATM or don't ask for the funds to be available right away. My business account's limit is $1K

However, a few times I've asked for the funds to be made available right away, and the manager or assistant manager would take the check and do some magic in the back and then the funds ($3-4K) would be available.

Re:This is not new (1)

tlhIngan (30335) | more than 3 years ago | (#36800318)

There are two states for payments - initiated and posted.

Initiated is when you write a check or use your credit card. Posted is when the money ends up in their final accounts. Initiation takes place in practically real time (they have ot make sure the money's there after all) at which point the funds are "locked", but the actual posting depends on the evidence being presented.

The thing with cheques is that it's often sent through the mail, so you get a day or two of "float" before the actual initiation begins. Sites that send the image off can do an instanteous check of your account balance in real time, but the actual posting takes days.

In scanned image based systems, the images take a few days to process. In traditional chequing, the actual cheque goes from the merchant to their bank, then their bank mails it off to the clearinghouse, who may send it up to another clearinghouse, then onwards to the payer's bank which processes the cheque and sends it back to the payer. It's all mail based and can easily take a couple of weeks or more. Then the bank sends notification that yes, the funds are on the way.

For credit cards, it takes a few days as the merchant's processor batches them up, then forwards it onto the credit card company who distributes the transactions the target bank and actually performs the transaction. You may notice on the online bills that recent transactions are listed but not as posted, meaning they're held but the final transaction amount isn't in yet so your limit is reduced, but no money has changed hands. (The initial authorization may not be for te exact amount charged - e.g., gas station pumps often charge $150 prior to fillup (which is problematic if you're close to your limit), and restauranges may also do up to 25% more to account for tip. When you pay your bill or finish filling up, the actual amount is posted).

Not quite (5, Informative)

thePowerOfGrayskull (905905) | more than 3 years ago | (#36780552)

We haven't been replacing those aging COBOL-based apps - that's a massive infrastructure that is well proven and works.
When you have systems that churn through billions of daily transactions across millions of accounts, you don't just swap out the systems that do that processing if those systems are working well. It's not glamorous, but it's reliable and it works - and is not prone to new (and expensive) bugs that come with new development.

No, what happened a few years ago was that we started upgrading the hardware and building new, more modern layers to fit on top of those back end systems. But replace them? Replacement is something that is happening very, very slowly. Think of it like erosion - the edges get worn down, we shore them up here and there. And when we have NO other choice, we replace them.

We all ooh and aah over our 1000-TPS Weblogic systems - but forget that the backend COBOL applications are quietly handling all of that load and more.

Fortunately, I'm not involved in the "legacy" systems, so I can be one of those marveling over how fast our Java stack is ;)

These statements are my opinion and not representative of the beliefs or actions of my employer. etc, etc

Re:Not quite (1)

geekoid (135745) | more than 3 years ago | (#36781174)

haha, re replaced our system to get rid of those evil COBOL batch process and go to real time.

Now we just rub a process at night to update our info.
Plus it's less reliable and more expensive.
Way to go upper management.

Re:Not quite (1)

thePowerOfGrayskull (905905) | more than 3 years ago | (#36804376)

Our real-time systems are COBOL as well...

Honestly, there's nothing wrong with (as long as I don' thave to maintain it), and it does work. On the other hand, based on the reports we get from that team, it makes it impossible for them to change anything without speccing it out a year ahead of time...

Re:Not quite (0)

Anonymous Coward | more than 3 years ago | (#36782020)

Mod parent up. People seem to forget that the algorithms to compute compound interest haven't changed since that COBOL system was written so why are you writing them again? Remember the iPod glitch (I think it was an iPod) the other year where someone cocked up the leap year code they were writing, introduced an infinite loop and caused a million devices to hang one midnight?

Having confidence that the system is going to work correctly tonight is a wonderful thing (after all, it worked correctly for the last thirty years).

Debits are already real time. (3, Insightful)

PeanutButterBreath (1224570) | more than 3 years ago | (#36780568)

Deposits? Pneumatic tube to the abacus room.

Re:Debits are already real time. (2)

flaming error (1041742) | more than 3 years ago | (#36780656)

Pneumatic tubes.

Some say they suck, others say they blow. I just think they're a blast.

Effects of Hyper Inflation (1)

DigiShaman (671371) | more than 3 years ago | (#36780658)

I don't think I'm grasping the concept here, but if retail stores tap into real-time banking, does that mean we will see digital price tags on products change rapidly in periods of hyper-inflation? That would be fun to watch (not).

Re:Effects of Hyper Inflation (2)

alexander_686 (957440) | more than 3 years ago | (#36780766)

Nope. The current state for most banks run process on a overnight cycle.

So if you transfer $1 from checking to savings it will happen overnight.

If you buy something at a retail store with a check, what normally happens is that
  1. the retail store closes it's book at the end of the day and sends the data to their bank.
  2. The retailer's bank sends the data to your bank overnight.
  3. Your bank processes the data on their overnight cycle.

So the next time you buy something with your check card see how long it takes to show up in your account. (Mind you, most of the time a provisonal transaction will be entered reducing the amount of cash in your checking account to make sure you don't overdraw - but that is just provisional). Normally 2, 3 days. In "real time" you would see the debit right away.

So, this is not so much to combat hyperinflation, it is to squeeze "float" out of the system. If you are old enough you can remember writting a check and waiting days for the check to clear. Durrning that time one could earn intrest [remeber those days?], or heck, not even have the money. [It's illegal to do so, but a lot of people did it to get a short term intrest free loan until there next pay check.

Re:Effects of Hyper Inflation (0)

Anonymous Coward | more than 3 years ago | (#36781158)

I'm shocked, shocked to find a ditto head that doesn't understand finance.

Re:Effects of Hyper Inflation (3, Insightful)

DigiShaman (671371) | more than 3 years ago | (#36781260)

I'm not ashamed to ask questions in areas of knowledge that I lack. I understand basic economic theory, but I'm not an accountant. Real-Time banking is new concept to me, which is why I asked and provided and example that may or may not be applicable. Alexander responded with excellent clarification.

If only more people would start asking questions rather then provide arrogant and snarky remarks such as yours, this forum would be a better place to read.

Re:Effects of Hyper Inflation (3, Informative)

n6kuy (172098) | more than 3 years ago | (#36782656)

Welcome to Slashdot!

Grab more money from customers (0)

Anonymous Coward | more than 3 years ago | (#36780676)

Maybe it's just the effect of being on the internet for so long, having become used to seeing/hearing about email scams, trojans, super-villain like invasive advertising, privacy violations and tracking... that whenever I hear someone wants my money I draw an image of a sleazy crook somewhere in the back of my mind. And I want to have nothing to do with them. Queue AdBlock, NoScript, RequestPolicy, Ghostery, RefControl, BetterPrivacy... Going on the internet safely seems akin to preparing for sex with a diseased prostitute. Or a nice girl you know is sleeping around with the not so local man-whore (Google, DoubleClick...) that every other girl sleeps with as well.

Anyway from the summary I got the same bad feeling about the banks as I get from advertisers and spam. I guess somehow in my mind it should be me who wants to exchange my money for a quality product that I want or need, not them wanting to squeeze money from me any way they can, being it aggressive advertising, psychological manipulation or plain fraud and theft. Or in the case of banks all kinds of tariffs and costs, meanwhile getting little for the money sitting in the account while it's being used to give out expensive loans.

If you come to me to get my money instead of me coming to you then I'm a victim not a customer.

Maybe the Muslims were right, there shouldn't be an interest rate. Seems wrong and unfair to make money from just having money in the first place.

"... upgrades as a path to... existence." FTFY (1)

Jane Q. Public (1010737) | more than 3 years ago | (#36780824)

Banks are hurting right now. And why shouldn't they be? They made boatloads of bad decisions a few years ago, and are trying to make everybody else pay for them.

A lot of people I know have given up their bank accounts altogether. Too many fees, too much BS. At a time when the banks should have been wooing customers with better deals, they piled on the fees and cut service.

Let 'em fail. If they bring back good service at a decent price, well, okay. But the whole fractional-reserve banking system in this country has gone to hell in a handbasket anyway. (Which was inevitable. We were just unlucky enough for it to happen now.) Better to just end the Fed and banking rules as we knew them. Back to non-inflationary gold as money.

They aren't "too big to fail". Some of them have gotten to big not to.

Re:"... upgrades as a path to... existence." FTFY (1)

Jane Q. Public (1010737) | more than 3 years ago | (#36780840)

"too", damnit. Too big.

Re:"... upgrades as a path to... existence." FTFY (1)

afidel (530433) | more than 3 years ago | (#36780922)

I've had a checking accounts for 17 years and never once paid any fees for them, if you are paying tons of fees you are either impoverished or seriously mismanaging your finances (or both).

Re:"... upgrades as a path to... existence." FTFY (1)

taxman_10m (41083) | more than 3 years ago | (#36782930)

Perhaps you are grandfathered in? I got a TD Bank checking account a few years back where the main feature of the account was that it had no minimum balance. A few months later they added a minimum balance which I never realised until I saw that I had been dinged with multiple low balance fees on a statement I happened to check. The terms on this account I have seem to change month to month. Now I watch it like a hawk whereas before I was under the impression I could drop money into it every once and a while and it would be there and grow little by little as I saved.

Re:"... upgrades as a path to... existence." FTFY (1)

afidel (530433) | more than 3 years ago | (#36783162)

Even when I was unemployed for 7 months I never dropped below $1k in my checking account, but mine actually has no minimum balance (for now, if Congress and the fed squeeze the banks enough they might impose one).

Re:"... upgrades as a path to... existence." FTFY (1)

Jane Q. Public (1010737) | more than 3 years ago | (#36783318)

"for now, if Congress and the fed squeeze the banks enough they might impose one"

See? You are illustrating my point. You know very well that if they are "squeezed", rather than luring new customers by giving better service, they will (and have) impose harsher conditions on their existing customers instead. No, that is NOT inevitable. It's just plain bad business. Banks have had it both ways for so long that they just don't seem to know what good business is anymore.

Take your money out. Let 'em fail. Just don't do it all at once.

Re:"... upgrades as a path to... existence." FTFY (0)

Anonymous Coward | more than 3 years ago | (#36781786)

If you are paying fees on your bank account, find a credit union or use an online bank savings account like those from ING Direct or Charles Schwab. There is no reason to ever pay fees for a checking/savings account.

Cool (0)

Anonymous Coward | more than 3 years ago | (#36780968)

Now I can verify that I've received that 0.15% quarterly intererest payment on my $5000 even faster. Lookout Starbucks, here I come. I'm ordering... umm... a tall coffee. Yep. That's it. Thanks Mr. Banker.

Fractional Reserve banking, anyone? (0)

Anonymous Coward | more than 3 years ago | (#36781322)

If you don't know what that means... words fail me.

ALL you need to know about banks is that they counterfeit billions of dollars into existence every week, and then expect YOU to pay it back with REAL labour and REAL, physical assets...

Re:Fractional Reserve banking, anyone? (1)

Roachie (2180772) | more than 3 years ago | (#36783098)

Look guys, the Coward gets it!

In other parts of the world, spend much higher (0)

Anonymous Coward | more than 3 years ago | (#36782300)

Australia's biggest bank alone is spending over A$1bn (US$1.07bn) on core banking modernisation. $100m seems like a small number

Takes 1 second for bank to accept my money (1)

presidenteloco (659168) | more than 3 years ago | (#36782558)

and 3 days to 2 weeks to clear a check and credit it to me. Hmmm.
Definitely some room for improvement.

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