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Banks

Banks. Some parts of them are good, some are bad. Let’s ignore their really bad repossessing-your-home side for a while and concentrate on what they’re good at. Many years ago, some guy realised that he could make money by storing someone else’s for them and then lending it to other people whilst they weren’t using it, and so on. Many highly confusing methods of extracting more money out of other money have since derived from this original approach.

Amongst some of those crazy things that banks do lies trading. Trading on the stock market. Some banks do automated trading, which has led to the acceleration of the stock market, with banks now requiring low latency links to stock exchanges to get a competitive edge.

Whilst firing money that they don’t necessarily have around at high speed using automated money cannons, the banks move their customers’ money around at extremely slow speeds. Many of them insist on sending their customers bits of processed dead tree every month or so to remind them about their money. When the customer wants to move her/his money into someone else’s account, they invariably have to wait a few days before it arrives.



Banks repurpose old cannons to fire money around. Photo under CC license — from flickr user StarbuckGuy.

So banks seem to have two faces. One face is highly automated and fast, whilst the other is slow, regularly resorts to paperwork, and doesn’t have a automatable interface. Unfortunately, the majority of people are exposed to this slow moving face. Presumably this face is slow moving and not automated because the demand for speed is low. I think it’s really sad that people don’t see the potential to automate the really mundane parts of banking away.

I share a rented house with others. I do the house “accounts”. There’s a spreadsheet (don’t get me started on spreadsheets… that’s a rant for another time) that I carefully maintain that annotates each transaction that occurs in the house bank account with things like who is responsible for them. The spreadsheet divides bills between people in the house.

I tend to put more money into the house account than is needed because the manual transfer and annotation of data between my bank’s website and the spreadsheet is extremely boring. The insulation that this extra money gives allows me to spend less time doing it. If my bank provided some sort of API that’d allow me to extract useful information about my accounts, then this work would be much less tiresome. Another application of bank automation is paying rent every 3 months. I don’t think any of the banks that I have accounts with allow me to set up standing orders with arbitrary periods — they seem to assume that everyone wants to pay monthly. Again, an API would allow me to script my transfers and set up more “advanced” standing orders.

I have accounts with several banks. Filing all the paperwork they send me is a boring chore. Then there’s all the forms that need completing to transfer money between ISAs. Misery!

In his “How To Become A Hacker” document, Eric Raymond writes:

Hackers (and creative people in general) should never be bored or have to drudge at stupid repetitive work, because when this happens it means they aren’t doing what only they can do — solve new problems. This wastefulness hurts everybody. Therefore boredom and drudgery are not just unpleasant but actually evil.

To behave like a hacker, you have to believe this enough to want to automate away the boring bits as much as possible, not just for yourself but for everybody else (especially other hackers).

Are banks moving in the right direction for their clients to automate interaction with them? No. They’re distributing devices that require people to be present when they do things related to their bank. We can only hope that one day enough of their customers understand that scripting their banking is the way forwards. I severely doubt this will happen within the next 20 years.

Whilst on the topic of banks, has anyone else noticed that the barclaycard’s “contactless payment” scheme looks like one of the most insecure things ever devised!?

Posted at 7:22 pm on Sunday 19th July 2009

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