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The Associated Banks

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Title: The Associated Banks


1
The Associated Banks
  • Terry Bobo
  • Laquant Bain
  • Melanie Jones
  • Matt Gregory
  • www.prenhall.com/stamper/bdc

2
Background
  • The Associated Banks (TAB) was formed under a
    holding company through the merger of eight
    independent banks in the western U.S. Like most
    banks, these eight banks all offer checking,
    savings, ATMs services, certificates of deposits,
    Visa/MasterCard, and etc.
  • TAB, the holding companys objectives are to
    provide its customer base with consistent
    comprehensive services, and expand into the
    Midwest, Eastern Seaboard, and South to form a
    national chain of banks.
  • In order to reach these objectives, TAB are to
    consolidate the eight banks and make them
    profitable.

3
Objectives of the consolidation
  • Retain the individual character of each bank
  • Allow any customer of any of the eight banks to
    do business with the other seven member banks
  • Make inter- bank transactions transparent to
    customers
  • Protect against fraud for inter- bank
    transactions
  • Provide uniform services
  • Make a profit and be efficient

4
Maintaining Bank Character
  • TAB knows that because of the consolidation some
    of its customers will move their accounts,
    because some customers prefer local banks
    compared to regional or national chains.
  • TAB intends on minimizing customer loss, by
    maintaining the individual character of each
    bank, retaining commonly used instruments as long
    as possible, and retaining the current employees.

5
Inter-bank Services
  • TAB plans to provide customers with services from
    each of the eight banks.
  • The services will include ATMs, check cashing
    privileges, savings account withdrawals, and etc.
  • Also each customer will be provided and serviced
    by a home bank (bank where there account was
    opened) along with a home bank account
    representative.

6
Providing Transparent Transactions
  • Customers will be able to perform the same
    transactions at a member bank that a customer
    could perform at his or her home bank, with the
    only difference being is, maybe, a difference in
    slips or ATMs. Most customers are used to these
    differences.

7
Protecting against Fraud
  • TAB incurs a great risk of fraud along with the
    implementation of transparent transactions,
    because verifying account balances and customer
    signatures would be difficult at the outset of
    the consolidation.
  • As a result, six measures are proposed
    disallowing inter bank transaction until a
    permanent solution phase implementation using
    switched data communications links to verify
    balances and packet switching network services to
    provide connections between member banks using
    voice communications authorizations, and trusting
    the customer.

8
Providing Uniform Services
  • This somewhat contradicts the goal of maintaining
    individual bank character, and a compromise
    between these goals are needed. TAB ultimate goal
    is to provide the same services at each bank at
    the same rates.

9
Computing At The Member Banks
  • Management sees computerization as the key to
    consolidating the banks. Unfortunately,
    connecting the computing facilities of the member
    banks is not a simple task. The problem arises
    because the hardware and software used by the
    member banks is not homogeneous. Thus even
    though the computing systems can be easily
    networked, the software interfaces to allow
    immediate account inquiries and updates your
    account.

10
The Albuquerque Bank
  • This bank uses IBM hardware and banking software
    systems procured from a third party, Hogan System
    Incorporated.
  •  
  • For online transactions, the software uses IBMs
    Customer Information Control System (CICS) as the
    transactions control process.
  •  For Controlling ATM transactions, the bank uses
    Tandem Computers running Applies Communications
    Incorporated software.

11
The Boise Bank
  • It is the smallest of the banks and one of two
    banks with unusual data processing
  • procedures.
  •  
  • Boise uses a service bureau to provide its
    computing services. The only in-house
  • computers are five microcomputers. These are
    used for loan analysis and to locally process
    data downloaded from the service bureau.
  •  
  • Boise owns the five microcomputers, the terminals
    that connect to the service bureaus system, and
    several ATMs.

12
The Denver Bank
  • The Denver bank uses Unisys hardware and
    software.
  •  
  • For on-line processing, the transaction control
    process is a standard message control system
    offered by Unisys.
  • The ATMs are also controlled by the Unisys system.

13
The Phoenix Bank
  • The Phoenix bank uses IBM hardware and software
    that was developed in-house.
  •  
  • The on-line portion of the system runs under
    IBMs Customer Information Control Systems (CICS)
    transaction control process.
  •  
  • The ATMs are also controlled by CICS.

14
The Salt Lake City Bank
  • The Salt Lake City bank uses Tandem hardware and
    Applied Communications Incorporated software.
  •  
  • This software makes use of Tandems PATHWAY
    transaction control process for on-line services.

15
The Tucson Bank
  • The Tucson bank has the second unique approach to
    computerized banking. In 1988, it decided to sell
    its aging mainframe system and replace it with a
    network of microcomputers and a file server on a
    local area network.  
  • The microcomputers are used to provide all
    on-line services including ATM, teller terminal,
    and loan analysis. 
  • A service bureau is used for batch
    processing--for example, check clearing.
  • Clearly, the banks have taken diverse courses in
    setting up computer services.

16
  • With the exception of the banks using service
    bureaus, all of the banks own the equipment they
    use. The banks using a service bureau own all the
    equipment they use locally, that is, terminals,
    microcomputers, modems, and multiplexers.

17
TABs Primary Applications
  • 1.) Automated Teller Machines (ATM)
  • 2.) Teller Terminal
  • Electronic Journal
  • Memo or on-line account positioning
  • Automatic balancing
  • Off-line journal (if host is not available)
  • Enforcement of check cashing limits
  • Security provisions
  • Teller training modes

18
  • 3.) Safe Deposit
  • 4.) Loans
  • Applicant information
  • Loan authorization
  • Loan pricing
  • Loan tracking

19
  • 5.) Collections
  • 6.) Funds Transfer
  • 7.) Point of Sale (POS)
  • Check authorization
  • Electronic gas pumps
  • Inventory control
  • Merchant cash management
  • Electronic messages
  • Electronic draft capturing

20
  • 8.) Microcomputer Banking Services
  • 9.) Management Information Support
  • 10.) Security

21
Implementation Approaches
  • Centralized data processing.
  • Decentralized data processing.
  • Regional processing.
  • Distributed data processing and databases.

22
Centralized Data Processing
  • One central data processing center.
  • Terminals and microcomputers connect to central
    facility.
  • All data is stored in the central facility.
  • Data needed for local manipulation must be
    printed output.

23
Centralized Network Configuration
24
Decentralized Data Processing
  • Each bank has its own computer system and
    customer database.
  • Database is not truly distributed.
  • Transfers take place as if the banks were not
    associated.
  • Each bank is responsible for its own operations
    and applications.

25
Decentralized Network Configuration
26
Regional Processing Centers
  • Compromise between Centralized and Decentralized
    Network Configurations.
  • Two or more processing centers.
  • Two or more member banks to each processing
    center.
  • All networked to provide inter-bank linkages.

27
Regional Network Configuration
28
Distributed Data Processing/ Databases
  • Advantage of central and distributed system.
  • Data is distributed and located closest to where
    it is used.
  • Information can be retrieved as if from a
    centralized node.
  • Looks like a decentralized configuration with
    different software implementation.

29
Terrys Question
  • How can a risk of Fraud be incurred by TAB with
    transparent transactions?

30
Laquants Question
  • Why do the different member banks want to
    consolidate?

31
Melanies Question
  • What are some of the other Point of Sale services
    that TAB would like to implement?

32
Matts Question
  • What are the four types of implementation
    approaches that the TAB are going to try?
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