Automated Float Pricing System for Bank Deposits

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Solution Overview

Problem

The banking industry faces challenges in efficiently and accurately assigning float pricing characteristics to deposit credits due to the complexity of managing accounts across disparate demand deposit account systems and changes in account characteristics, such as domicile, leading to a labor-intensive process for bank management.

Innovation Solution

An automated system continuously assigns normalized market segments to accounts by consolidating information from various demand deposit account systems, determining current domestic information, and assigning float pricing based on deposit location and account characteristics, incorporating a transaction exchange and float system to produce accurate float assignments.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If banks manually assign float pricing characteristics to deposit credits, then accuracy can be maintained, but the process becomes labor intensive and inefficient

Engineering Contradiction:

Improvefloat pricing accuracyVSAvoidfloat management efficiency

Core Design Contradiction:

Measurement precisionVSProductivity

Solution Approach 1:

The system enables self-service by having the automated float pricing system independently assign float pricing characteristics to deposit credits without requiring manual intervention from bank management. The system extracts account information, determines current domestic information, and automatically produces float assignments, allowing the system to serve itself rather than requiring human operators to perform repetitive manual tasks.

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The patent replaces the mechanical manual process of assigning float pricing characteristics with an automated computer-based system. The mechanical system involves manual extraction and assignment of pricing characteristics, while the automated system uses software to extract account information from disparate DDA systems, determine current domestic information, and automatically generate float pricing assignments, thereby eliminating the need for manual labor.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Ease of manufacture

If banks use historical account number schemes to assign float characteristics, then the process is simplified, but it becomes inaccurate when accounts are reorganized or merged

Engineering Contradiction:

Improvefloat assignment simplicityVSAvoidfloat pricing accuracy

Core Design Contradiction:

Ease of manufactureVSMeasurement precision

Solution Approach 1:

The system implements dynamics by continuously extracting and updating account information from disparate DDA systems to determine current domestic information. Instead of relying on static historical account number schemes, the system dynamically adapts to account reorganizations, mergers, and changes in account characteristics by continuously refreshing the domestic information database, ensuring float pricing accuracy remains current despite structural changes.

Inventive Principle:

Principle #15Dynamics

Solution Approach 2:

The patent incorporates feedback mechanisms where the system continuously monitors and updates account information from various DDA systems. The extracted account information and current domestic information are fed back into the float pricing determination process, allowing the system to adjust float assignments based on the most current account status, thereby maintaining accuracy despite organizational changes.

Inventive Principle:

Principle #23Feedback

3Measurement precision

If banks consolidate information from multiple DDA systems, then current account information accuracy is improved, but system complexity increases

Engineering Contradiction:

Improvecurrent domestic information accuracyVSAvoidinformation consolidation complexity

Core Design Contradiction:

Measurement precisionVSDevice complexity

Solution Approach 1:

The system applies segmentation by dividing the complex task of consolidating information from multiple DDA systems into distinct functional modules. The process is segmented into: extracting account information from individual DDA systems, determining current domestic information, normalizing market segments, and assigning float pricing characteristics. This modular segmentation makes the overall complex process more manageable and implementable.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The patent introduces an intermediary processing layer that acts as a mediator between the disparate DDA systems and the float pricing assignment. This intermediary system extracts information from various DDA systems, normalizes the data, determines current domestic information, and then produces float assignments. The intermediary layer simplifies the complexity by providing a standardized interface for handling diverse data sources.

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS8126803B2Automated float pricing for geographically distributed deposits and accounts

Publication Date: 2012.02.28 BANK OF AMERICA CORP

AI summary

An automated system can be provided for continuously and accurately assigning float to deposit credits within a financial institution. A normalized market segment is continuously assigned to each account by extracting information from a plurality of disparate demand deposit account systems. Deposit credits are gathered from disparate known capture sites and the normalized market segment is assigned to a deposit credit for a corresponding account. A float assignment can then be made for a deposit credit so that the float reflects both a deposit location and current domestic information for the corresponding account. A system for implementing the invention can include a float system connected to a transaction exchange system.