Bank computing turns 40

October this year will mark a significant milestone in Australia’s computing history – the fortieth anniversary of the first computer used by a trading bank.

Coined as Fabacus, the First Australian Bank’s Accounting Computer Used in Sydney, it was commissioned by the then Bank of NSW – now Westpac – in August 1964 and went live in October.

Fabacus’ original supervisor Ian Hoey recalls working in a Sydney city branch on King and George Streets when he was selected to run the new computer room.

“I started in the computer room and had three operators for Fabacus - a General Electric GE225,” Hoey told Computerworld. “A smaller state savings bank had a computer but this was certainly the first trading bank computer.”

Originally developed by General Electric to ease the Bank of America’s exponential cheque processing requirements, the GE225 system had 20 kilobytes of core memory and was the size of three wardrobe-size compartments.

The GE225 also had six tape drives, a punched card reader, printer, card punch, typewriter, and two cheque sorters.

“GE had a 210 model which was much slower,” Hoey said. “The GE225 was popular and companies including the ANZ bank, the Snowy Mountains Hydroelectric Scheme, and Carlton United Breweries in Melbourne also had them. GE then went on to produce the 235 and 600 series which were well ahead of its time.”

Previously the bank had had a records system to do unit trust applications; people moved over to work on the computer from punch-card machines.

The cultural transition to the computer age was varied; some people liked it but others couldn’t cope, Hoey said.

However, time pressures don't seem to have changed in the intervening years. “We had a short processing window to bring branches online which created more pressure to get it merged and ready,” he said. “With a processing rate of 40 cheques per second reducing the reject rate was critical, or we didn’t get customer statements or branch reports out.”

The bank also bought a GE600 which – when GE sold its computer business to Honeywell in 1970 – became the Honeywell 6000.

Having retired in 1991, Hoey remembers an era when you could “put your hands on” mission-critical systems.

“But with computers the impact of one person could really wreak havoc,” he said. “The bank could not have kept operating with the increasing volumes without computers. The ledger machines were almost computers in those days.”

Businessman Dennis Bainbridge – then GE’s lead service technician for installed systems – helped commission Fabacus which was the third GE225 installation in the country.

“GE had its own system in York Street, Sydney, and the University of Queensland installed one in 1962 for research.

“This was the first banking system in Australia and at the time GE was the world leader in banking technology and sold a lot of systems.”

Bainbridge said the GE225 – which performed “quite well” – ran until 1972, was replaced by a GE235 which was replaced by IBM mainframes as GE exited the computer business.

Westpac CIO Simon McNamara said those behind Fabacus are true pioneers of banking in Australia, describing it as a system ahead of its time. "While we certainly aren't faced with the same challenges as 40 years ago, the Fabacus team paved the way for us to continually strive towards technology solutions that improve efficiencies and productivity for our employees, and ultimately provide superior customer service."

To celebrate the anniversary, staff from the old Bank of New South Wales will have a reunion on October 23 in Sydney.

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More about ANZ Banking GroupCritical SystemsGeneral ElectricHoneywellIBM AustraliaUniversity of QueenslandUniversity of QueenslandWestpacWestpac

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