ERMA: A milestone in bank automation

ERMA_wiringToday in 1959, Bank of America received the first ERMA (Electronic Recording Machine, Accounting) system.

From Wikipedia: In 1950, Bank of America was the largest bank in California, and led the world in the use of checks. This presented a serious problem due to the workload processing them. An experienced bookkeeper could post 245 accounts in an hour, about 2,000 in an 8-hour workday and approximately 10,000 per week. Bank of America’s checking accounts were growing at a rate of 23,000 per month and banks were being forced to close their doors by 2:00 PM to finish daily postings…. In July 1950 bank of America contracted SRI for an initially feasibility study for automating their bookkeeping and check handling…

The final prototype for the ERM (Electronic Recording Machine) system contained more than a million feet (304,800 metres) of wiring, 8,000 vacuum tubes, 34,000 diodes, 5 input consoles with MICR readers, 2 magnetic memory drums, the check sorter, a high-speed printer, a power control panel, a maintenance board, 24 racks holding 1,500 electrical packages and 500 relay packages, and 12 magnetic tape drives for 2,400-foot (731-metre) tape reels.

ERM weighed about 25 tons (22.7 tonnes), used more than 80 kW of power and required cooling by an air conditioning system. By 1955, the system was still in development, but Bank of America was anxious to announce the project. At the time, computers (still known as “electronic brains”) were all the rage; if Bank of America could announce that they were using them, it would convey a sense of futuristic infallibility. In September 1955, the Bank of America froze the design.

By this point, no fewer than 24 companies had expressed interest in building the production machines, and General Electric won the competition. The company took the basic design, but decided it was time to move the tube-based system to a transistor-based one using core memory.… 

The first production ERMA (Electronic Recording Machine, Accounting) system the GE-100, was installed today in 1959. Over the next two years, 32 systems were installed, and by 1966 twelve regional ERMA centers served all but 21 of Bank of America’s 900 branches. The centers handled more than 750 million checks a year, about the number they had predicted to occur by 1970.

The automation was so effective that it allowed Bank of America to be the first bank to offer credit cards attached to a user’s bank account. ERMA machines were replaced with newer equipment in the early 1970s.

See also: From Analog to Digital: Bank Checks

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