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Springer Handbook of Automation pp 1613–1627Cite as

Automation in Financial Services

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Abstract

This chapter addresses automation in the financial services industry with a focus on small banks and credit unions. The financial services industry includes all organizations that engage in or facilitate financial transactions. Automation is essential for these firms to both lower cost and differentiate their services. Small banks and credit unions are an important subset of this industry, with unique automation needs to enable them to compete with large, international firms.

The chapter begins with a description of the financial services industry in general, then moves on to describe community banks and credit unions, how they operate, and the role of automation. The chapter then addresses two key automation areas for these institutions: their core systems that support basic account processing, and a key customer-facing system – Internet banking. Factors that drive success and recommendations for how to approach each of these automation areas is discussed. For these small financial institutions, successful automation of back-end systems depends on how they source the system, with outsourcing both raising costs and the number of channels through which they distribute their products. Successful automation of customer-facing systems, such as Internet banking, depends on getting their customers to use the system. Because of this, success is more of a management than a technical issue. The chapter concludes with a discussion of emerging trends, technologies, and issues.

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Abbreviations

ACH:

automated clearing house

ASP:

application service provider

ATM:

air traffic management

ATM:

asynchronous transfer mode

ATM:

automatic teller machine

CEO:

chief executive officers

DDA:

demand deposit account

EFT:

electronic funds transfer

FACT:

fair and accurate credit transaction

FASB:

Financial Accounting Standards Board

IB:

internet banking

IT:

information technology

NAICS:

North American Industry Classification System

NPV:

net present value

NSS:

Federal Reserve National Settlement System

NYSE:

New York Stock Exchange

ODFI:

originating depository financial institution

SEC:

Securities and Exchange Comission

STCU:

SmallTown Credit Union

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Authors and Affiliations

  1. Accounting, Finance, Information Systems and Economics, Western Carolina University, 28723, Cullowhee, NC, USA

    William Richmond PhD

Authors
  1. William Richmond PhD
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Correspondence to William Richmond PhD .

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Editors and Affiliations

  1. PRISM Center, and School of Industrial Engineering, Purdue University, 315 N. Grant Street, 47907, West Lafayette, IN, USA

    Shimon Y. Nof

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© 2009 Springer-Verlag Berlin Heidelberg

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Richmond, W. (2009). Automation in Financial Services. In: Nof, S. (eds) Springer Handbook of Automation. Springer Handbooks. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-78831-7_91

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  • DOI: https://doi.org/10.1007/978-3-540-78831-7_91

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-78830-0

  • Online ISBN: 978-3-540-78831-7

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