EH.Net Book Review: Technological Innovation in Retail Finance: International Historical PerspectivesPublicado: 22.11.2013
Published by EH.Net (November 2013)
Bernardo Bátiz-Lazo, J. Carles Maixé-Altés, and Paul Thomes, editors, Technological Innovation in Retail Finance: International Historical Perspectives. New York: Routledge, 2011.
xvi + 319 pp. £85/$125 (hardback), ISBN: 978-0-415-88067-1.
Reviewed for EH.Net by Peter Wardley, Department of History, Philosophy and Politics, University of the West of England (Bristol).
Until recently there was a largely unbridged historiographic divide between monetary historians, interested largely in stories about monetary aggregates, economic performance and financial policy, and bank historians, authors of scholarly texts that recount the origins, growth and, on occasion, the demise, of specific financial institutions. However, over the last three decades this separation has been to some extent diminished, prompted in part by research that focuses on the application and organization of new technology in financial institutions. In part, this is a result of a widespread familiarity with personal computers along with a growing awareness of the importance of the role of information technology throughout the modern economy. More specifically, it has become increasingly apparent to those outside the financial sector that the processing of information within financial institutions is a major and dynamic factor that should not be neglected. If one of the ea! rliest and most advertised events in this process was the “Big Bang,” that transformed the nature of business on the London Stock Exchange in October 1986, then the “Global Financial Crisis” of 2007-08 demonstrated the extent and significance of international networks that knit together the world’s financial institutions. In this environment, academic interest in the internal structures of banks has increased and analysis of the adoption and organization of information technology in the financial sector, previously almost unheard of, is now well-established. It is in this context that this edited collection makes a novel and valuable contribution by providing a comparative study of technological change in European and North American retail finance.
An editorial introduction, entitled “In Digital We Trust,” provides an enthusiastic and detailed justification for the study of the introduction and usage of information and telecommunication technology (ICT) in the financial sector. This stresses the evolutionary and contingent nature of the diffusion of ICT within financial institutions which varied according to the greatly differing environments that differed by the market segment they operated in, the economic circumstances they faced, and the social, legal, political and cultural settings in which they developed. However, a general pattern emerges in the largely hard-headed and realistic approach adopted by the managers who were responsible for the acquisition and productive use of new machines and applications; often the technology led to the adaptation of existing methods rather than the adoption of completely new managerial practices. As the twentieth century saw a sequence of technological innovations! , which were largely incremental and adaptive in nature, for the most part a long term perspective is taken here. This recognizes the initial adoption of mechanical aids in the banking parlor (for example, the typewriter and telephone), then the employment of data recording instruments (adding machines) which was followed by increasingly complex data recording and processing machines (accounting machines, first powered manually and then by electricity). Computers of various types, from mainframe to micro, have been the most recent manifestation of this technological progression that depended on co-developed theoretical and scientific advances which have both sped up processing and increased memory capacity, approximately according to Moore’s law, at costs that have correspondingly diminished. The nature of this technological progression, as evident in the banking industry, is competently discussed in Lars Heide’s concluding chapter which might usefully be read a! s a guide to much that appears in the preceding chapters.
First, though, a note of caution. There was a major characteristic of retail finance, one that is really important in the first half of the twentieth century, the pre-mainframe era, which might not immediately strike readers who are more accustomed to the banking system of the United States which should have been more emphatically indicated here. In the U.S. the relatively small, single unit bank adopted mechanization in order to process the widest range of functions, from recording personal statements associated with the accounts of individuals to the assessment of the aggregate financial position of the bank. In Europe, and notably in England’s “Big Five” High Street banks, the relatively much larger, multi-unit branched bank tended to undertake these two distinct operations at different locations; the former at the branch and the latter at the bank’s head office. Once recognized, this fundamental distinction explains a great deal about the diffe! rent rates and patterns of technological adoption and diffusion experienced across retail banking systems in different countries. Different technologies could be used for different purposes but similar technology could also be adopted in other environments to do different tasks. And, of course, there was some path dependency within systems that, for example, linked the adoption of mainframe computer systems after 1950 to the prior implementation of pre-World War II bank mechanization. Here it is interesting to note, at least in the British setting, that the staff associated with computerization do not appear to have learned as much as one might have expected from the experiences of their predecessors, the generation of then recently retired senior bank managers, who it might be argued had been more successful in the interwar years in introducing new technology. The evidence suggests that these pioneers appear to have a much clearer understanding of one the themes of this bo! ok: the machine had to serve the bank rather than dictate a ra! dical recasting of organizational practices. These themes appear prominently in chapters here that provide national case-studies.
Martha Poon’s account of the transformation of the credit risk calculations provided by the Fair Isaac Scorecard system highlights the significance of gender, a factor that is less prominent in the chapters presented here than it might be. In her story, before the introduction of electronic system, credit applications were “put-out” as raw data to local housewives who produced coded reports which were then processed by female operators of key punching machines to be coded. Even with the consolidation of a more completely office-based, machine-driven system of data processing, important “heritage” aspects, residual remnants of past practices, now deeply embedded in the calibration of the credit of individual consumers, persisted even as credit scoring became increasingly digitalized and automated. By contrast, women play no visible role in Joakim Appelquist’s study of “Technical and Organizational Change in Swedish Banking, 1975-20! 03,” which begs the obvious question about the nature of gender (in)equalities in Nordic society. This chapter provides an explicitly specified model whereby the adoption of different generations of ICT, from mainframe to internet via PC-based LANS, correspond with stages of a shift from Tayloristic bureaucracies to post-Taylorisitic organizations “characterized by flattened management structures, outsourcing, etc.” (p. 74). However, rather than the de-skilling of the labor force in a period of new technology adoption, à la Braverman, Appelquist argues that Swedish banks re-skilled their staff either by re-training existing workers or by substituting existing employees with replacements who were better equipped to deliver personal banking services of a more skilled nature.
Joke Mooij provides an exemplary account of the adaptation of new managerial structures and adoption of novel technologies that accompanied the consolidation in 1972 of the Rabobank Nederland (Coöperatieve Centrale Raiffeisen-Boerenleenbank), one of the world’s largest banks; this was achieved by the consolidation of two agricultural co-operative banks that had used earlier machinery within distinctive corporate cultures. Both had shared an initial commitment to Raiffeisen principles, one of which stipulated unsalaried management that made them very different from contemporary Anglo-Saxon co-operative enterprises, and faced challenges with respect to this defining characteristic caused by the technological and organizational changes narrated here.
Bernardo Bátiz-Lazo and J. Carles Maixé-Altés provide a comparative assessment of ICT adoption in a different “non-standard” corporate institution, the Savings Bank, by providing an historical evaluation of their development in Britain and Spain between 1950 and 1985; here they contrast the achievement in Spain of economies of scope, in the form of product portfolio, with the search for economies of scale in Britain. In both stories political factors are demonstrated to be significant though different in character. In Spain collaboration in the acquisition and operation of ICT shared by locally orientated, and sometimes relatively small, members of the Confederation of Spanish Savings Banks (La Confederación Española Cajas de Ahorros, or CECA) allowed the associated development of distinct regionally-based institutions, each of which grew a clearly defined profile in its community. This was far removed from the British ! experience. There, after over one hundred and seventy-five years of relative success in providing deposit facilities for inhabitants of their respective neighborhoods, and especially to the comparatively poor, the British state in the 1970s herded together seventy-five semi-autonomous Trustee Savings Banks into a single entity, the Trustee Savings Bank (TSB) that was subsequently floated on the London Stock Exchange in 1986. Unsurprisingly, the philanthropic motives of the pioneers of the TSB movement and the local orientation of each TSB were lost to history and within a decade the TSB was the subject of a “reverse-takeover” by Lloyds Bank. Nevertheless, the TSB has re-emerged recently when, at the insistence of the European Commission in 2012, its divestment was made a condition of the British state’s rescue package to salvage Lloyds Bank; however, the inaugurating publicity of the TSB Bank (sic) did not suggest that the re-emergence of a community-orien! tated financial institution devoted to the needs of the less w! ell-off was imminent.
The role of the British state is also revealed by Alan Booth and Mark Billings in their assessment of “Techno-Nationalism, the Post Office and the Creation of Britain’s National Giro,” which documents the creation of “very curious beast indeed” (p. 171). In addition to attempts by the British state to foster an indigenous computer-building industry, a persistent theme of the 1960s and 1970s, which could be generalized to encompass even more long-standing and recurrent policies to stimulate “high-tech” manufacturing in Britain, this evidences a political divide between the two parties that formed governments in the two decades before 1979. First, after the Radcliffe Committee Report of 1957, the Conservative administration saw in a Giro system a handy tool to nudge the commercial banks such that they became more responsive to the needs of the economy and more willing to address the shortcomings of their business behavior. Thereafter, Tony Benn, as Post Master General and then as Minister of Technology, in a Labour government whose leader had lauded the benefits of a scientifically informed transformation of society, supported the Giro as a prominent IT project within the nationalized sector of the economy that could contribute to this objective. However, the history of the Giro demonstrates a number of problematic features of this policy, including the difficulties of obtaining new technological capabilities which were embodied in imported equipment at a time when Britain suffered from recurrent Sterling problems and public spending difficulties.
Public perceptions of technical change in the financial sector have always been important and senior bank officials watched keenly the response of their customers, first to mechanization in the interwar years and later to computerization. As Ian Martin documents in “Britain’s First Computer Centre for Banking: What Did This Building Do?”, Barclays Bank was eager to shape public opinion in 1961 when it opened its No.1 Computer Centre near Euston station in London. However successful Barclays was in persuading its customers of the merits and advantages of its innovative strategy, and contrary to the case presented here, this was not first time that customer accounting in Britain had been dislocated “from its traditional confines of the individual bank branch” to be relocated to a centralized facility. This had been achieved, in association with a very similar publicity campaign to that narrated here, by the Westminster Bank some thirty years ea! rlier (Wardley, 2000). As this strategy was dependent upon the comprehensive mechanization of record keeping at its Head Offices (at Lothbury, hard by the Bank of England), readers should also treat with caution Martin’s associated statement that “British banks, with the exception of the Bank of Scotland …, did not make use of tabulating machines to perform centralised branch accounting” (p. 37). The Bank of Scotland, as with other banks in Scotland, was a laggard in this respect; in England, even the Co-operative Bank had mechanized by 1935.
Hubert Bonin’s “Mechanization of Data Processing and Accounting Methods in French Banks, circa 1930-1950” provides an excellent survey of the mechanizing bank that reviews the introduction of tabulators, accounting machines and electromechanical data processors in the context of financial organizations that adopted and continually adapted technical capabilities that reflected existing procedures and dynamic managerial strategies. Here new technology is always the handmaiden of “streamlining” that saw recurrent rounds of re-organization and standardization of information within banks. Bonin also identifies the extensive and eager exchange of information about mechanization among French banks, a tendency shared by contemporary English banks. However, and English contemporaries might have been surprised by its omission here, in France the formation of the Comité Permanent d’Organisation Bancaire in 1930 saw a collective agency creat! ed to encourage increased efficiency through information exchange concerning mechanization, more effective work organization, improved clearing arrangements and better statistics and costing data. Paul Thomes responds affirmatively to the question “Is There an ICT Path in the German Savings Banking Industry? (c. 1900-1970s)” by evidencing the recurrent pioneering role of savings banks relative to technology adoption both by Germany’s large commercial banks and by the co-operative banks that served both SMEs and agricultural enterprises. Some additional interesting questions are prompted by this chapter: how was it that German banks were able to introduce machine bookkeeping during the First World War and increase mechanization in World War Two when in Britain such resources were very deliberately directed by the state to military purposes? Why was it that the Banque d’Alsace-Lorraine so quickly came to correspond to the French pattern described by Bo! nin rather than the “IT path” that Thomes presents! for German banks? What is more certain is that a contemporary bank manager would have recognized a near 100% enhancement of the claimed productivity benefits had a hardware salesman suggested to him that “a machine-booking clerk could manage 500 entries a day against 180 done by hand: an efficiency gain of nearly 300 percent” (p. 124). Unfortunately, not only is this calculation wrong but it is one of the few examples provided in this collection of an explicit assessment of the gains, expected or realized, attributable to the introduction of new technology.
Although not the major subject of this collection, technological developments are prominent in some chapters; these include Juan Pablo Pardo-Guerra’s micro history of the successive stages of automation that delivered digitalization at the London Stock Exchange and David Stearn’s account of the iterative responses implemented by Visa to meet technical and organizational challenges of implementing a global consumer payment card system. Mexico provides the setting for Gustavo Del Ángel-Mobarak‘s study of the evolution of interbank connectivity though the use of ICT by its banks after 1965 which, despite an interlude of public ownership, once more illustrates a number of general themes. A novel and distinctive development here demonstrates the long term and continuing nature of technical change in banking; as early as 1934 wireless radio transmitters were used to transfer information between corporate headquarters and branches within Mexico City and this system was nation-wide within a decade.
Overall, this innovative anthology serves to remind that two polar positions can be discerned in studies that assess the impact of new technology. On the one hand, the adoption of novel devices can be captured by a “Gee whiz” response that emphasizes a dramatic break with past practices. Its polar opposite, by contrast, emphasizes long-run continuities and incremental developments. In this examination of technical innovation in the banking sector we find elements of both though generally the evidence presented affirms strongly the “slowly but surely” approach that one would expect from bankers who are often regarded as natural conservatives until the public is sharply reminded that risk-taking is a day-to-day activity for financiers. However, here it might also be noted that in this text at least two essential factors do not get the attention they probably deserve: one is a consideration of cost-benefit analysis of the adoption of new technology, b! oth in terms of the net savings aspired to and the reduction in costs actually achieved; the other is gender: the employment of female staff is a basic characteristic, if not universal feature, of technological change in the financial sector and less attention than is warranted is devoted to gender-related considerations.
Peter Wardley was editor of the annual review of IT for the Economic History Review (1990-95) and has written several articles and chapters on economic and business history. Among those relating to banking history are “The Commercial Banking Industry and Its Part in the Emergence and Consolidation of the Corporate Economy in Britain before 1940,” Journal of Industrial History, 3 (2000) 71-97 (see JIH 3 3 Wardley 2000 Banks low res) and “Women, Mechanization and Cost-savings in Twentieth-century British Banks and Other Financial Institutions” in Mike Richardson and Peter Nicholls, eds. (2011) A Business and Labour History of Britain: Case Studies of Britain in the Nineteenth and Twentieth Centuries.
Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator @ eh.net). Published by EH.Net (November 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview
Subject(s): Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s): Europe
Time Period(s): 20th Century: Pre WWII
20th Century: WWII and post-WWII
CALL FOR AUTHORS: Encyclopedia of World Poverty 2nd Edition
SAGE’s Encyclopedia of World Poverty 2nd Edition is now under development (1st Edition: Library Journal Best Reference, Booklist Editor’s Choice). This completely updated five-volume reference will provide extensive and current information on the changing world of poverty, as well as insight into the contemporary debates. Over 850 signed articles will explore poverty in various regions of the world, and examine the difficulties associated with the definition and measurement of poverty, along with its causes and effects. Pedagogical elements include a new Reader’s Guide, updated Chronology of World Poverty, updated Resource Guide, updated Glossary, and new index.
This comprehensive project will be published by SAGE Reference in 2015 and will be marketed to academic and public libraries as a print and digital product available to students via the library’s electronic services. The General Editor, who will be reviewing each submission to the project, is Dr. Mehmet Odekon, Skidmore College (General Editor of the 1st Edition). We are currently making assignments with a deadline of January 31, 2014.
If you are interested in contributing to this cutting-edge reference, it is a unique opportunity to contribute to the contemporary literature, redefining sociological issues in today’s terms. Moreover, it can be a notable publication addition to your CV/resume and broaden your publishing credits. SAGE Publications offers an honorarium ranging from SAGE book credits for smaller articles up to a free set of the printed product for contributions totaling 10,000 words or more.
The list of available articles is already prepared, and as a next step we will e-mail you the Article List (Excel file) from which you can select topics that best fit your expertise and interests. Additionally, Submission Guidelines will be provided that detail article specifications.
If you would like to contribute to building a truly outstanding reference with Encyclopedia of World Poverty 2nd Edition, please contact me by the e-mail information below. Please provide your CV or a brief summary of your academic/publishing credentials in related disciplines.
Thanks very much.
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SPIHE: Álvaro La Parra, An institutional study of the army during the Spanish Second Republic and the Civil War (1931-1939) (México, 26 de noviembre de 2013)Publicado: 20.11.2013
Queridos colegas y amigos,
Me complace invitarlos a la presentación
An institutional study of the army during the Spanish Second Republic and the Civil War (1931-1939)
a cargo de Álvaro La Parra Pérez.
La presentación será en español. La cita es el próximo martes 26 de noviembre a las 16 hrs en el salón 2245 de El Colegio de México. Anexo invitación para su difusión.
Con mis saludos
Dra. Graciela Márquez
Centro de Estudios Históricos
El Colegio de México
gmarquez @ colmex.mx
Tel. 5449-3000 ext. 3069
The Department of Social Sciences at Universidad Carlos III de Madrid offers two positions for full-time tenure-track Assistant Professors (“Profesor Visitante”) in Economic History and Institutions, beginning September 1st, 2014.
Candidates must have a Ph.D. degree at that date and have verifiable research experience in any area of Economic History. They should be able to teach introductory and advanced economic history courses during their contract period. In addition, the ability to teach development-studies related courses will be valued positively. While the ability to teach in English is mandatory, prior knowledge of Spanish is not required.
The position is offered on a four-plus-two year basis with the last two years conditional on passing an interim assessment after the third year of contract. Towards the end of the contract period, the candidate can ask for evaluation for tenure as Associate Professor based on the Department’s promotion criteria.
The contract is based on the terms regulated by the local Government of the Comunidad Autonoma de Madrid (CAM) for visiting professor contracts. The annual salary is stipulated as equivalent to that of an Associate Professor (Profesor Titular). In 2013, the basic annual salary for this category is 32,218 Euros gross.
Information about Universidad Carlos III de Madrid and the Department of Social Sciences can be found at
Interested candidates should send the following documentation:
* a cover letter
* a CV
* two letters of reference
* one copy/offprint of their most salient publication or research working paper (“job market paper”)
to the address:
Secretaria del Departamento de Ciencias Sociales
Att: Comision de Contratacion
Universidad Carlos III de Madrid
c/ Madrid, 126
28903 Getafe (Madrid) SPAIN
The deadline to receive the applications is January 31, 2014. During the
last week of March and the first week of April 2014 the Search Committee
will request pre-selected candidates to be available for the interviews and the presentation of a research paper at the Department personally or virtually as part of the selection process.
For inquiries on documentation, process, promotion criteria, etc., please refer to Dr. Markus Lampe, Academic Secretary of the Department, mlampe @ clio.uc3m.es / http://portal.uc3m.es/portal/page/portal/dpto_ciencias_sociales/home/faculty/Markus%20Lampe
Dr. Markus Lampe
Department of Social Sciences
Universidad Carlos III de Madrid
2014 Annual Cliometrics Conference
The annual Cliometrics Conference in 2014 will be held on the weekend of Friday, May 16 through Saturday, May 17 at Clemson University, Clemson, South Carolina and hosted by Clemson University and the National Science Foundation.
The conference is designed to provide extensive discussion of new and innovative research in economic history. Typically, twelve papers are selected for presentation and discussion. These are sent out to all conference participants in advance. Each paper is a single session, in which authors have five minutes to make an opening statement and the rest of the hour session is devoted to discussion among all conference participants. All participants are required to have read all papers and to attend the entire conference. At least one author must be a member of the Cliometric Society. For membership information contact Michael Haupert at haupert.mich @ uwlax.edu.
Proposals and requests to attend the conference will be accepted beginning Monday 18 November 2013. The deadline to submit a paper proposal or a request to attend the conference is Friday 17 January 2014. Those wishing to present a paper should provide an abstract and a 3-5 page summary of the proposed paper. We strongly encourage interdisciplinary proposals and participants. In choosing papers and participants, the host committee will assign priority to those who have not attended recently or who have never attended. Graduate students wishing to attend or submit a paper proposal must obtain a letter of recommendation from their dissertation advisor. Those whose papers are selected for presentation will be notified by Monday 17 February 2014 and are expected to provide a completed draft of the paper in the proper format for the conference volume no later than Wednesday 26 March 2014.
We STRONGLY PREFER that applicants submit their materials via the web at the following site: http://eh.net/2014-cliometrics-conference-proposal-submission/
Proposals (including addresses, phone numbers and email addresses) may also be e-mailed to clio2014 @ hawaii.edu or sent via snail mail to Cliometrics Conference Administrator, University of Hawaii Economic Research Organization, 2424 Maile Way, Rm 540, Honolulu, HI, 96822 USA.
Executive Director, Cliometric Society
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Dear Sir or Madam,
On 21-23 august, 2014, Utrecht University (in cooperation with the Netherlands Economic History Archives) will host the 18th annual congress of the European Business History Association. The theme of next year’s EBHA Congress is: Comparative Business History: Contrasting Regions, Sectors, and Centuries; please find attached the call for papers.
It would be great if they would hear about the congress and the fact that they can submit a paper or session proposal. Is it possible for you to announce our congress on your website and spread the call for papers amongst your members?
I hope to hear from you soon. Please let me know you have any questions.
Many thanks in advance and with kind regards, on behalf of the Local Organizing Committee,
Winny Bierman | Congress secratary | EBHA congress 2014 | Utrecht University | Drift 6 | 3512 BS | Utrecht | T. (0031) (0)30 253 6495 | EBHA2014 @ uu.nl | www.ebha-2014.eu | present: Mon-Fri 9 am – 5 pm
The John Carter Brown Library, an independently funded institution for advanced research in the history and culture of the Americas at Brown University, will award forty residential fellowships for the year July 1, 2014, to June 30, 2015. The Library contains primary materials related to the discovery, exploration, and settlement of the New World, to 1825. Fellowships are open to scholars working on all aspects of the Americas in the early modern period.
Short-term Fellowships are two to four months; monthly stipend, $2,100. Open to U.S. and foreign citizens engaged in pre- or post-doctoral, or independent, research. Graduate students must have passed their preliminary or general examinations by December 15.
Long-Term Fellowships are five to ten months; monthly stipend, $4,200. For NEH Fellowships, an applicant must be a U.S. citizen or have lived in the U.S. for three years preceding the application deadline. Other long-term fellowships are open to all nationalities. Graduate students cannot hold Long-Term Fellowships. PhD candidates can apply if all degree requirements, including a successful defense, meet the December 15 deadline.
Awardees must relocate to Providence and be in continuous residence for the award term.
The deadline for both short- and long-term fellowships is December 15, 2013.
JCB Library / 401-863-5010
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La Jornada: Celebran 85 años de la Biblioteca Miguel Lerdo de Tejada; abre portal en Internet
Periódico La Jornada
Viernes 15 de noviembre de 2013, p. 5
Carlos Marichal, investigador de El Colegio de México, afirmó que todos los historiadores económicos tienen un cariño especial por esta biblioteca, por su valor extraordinario y ser una joya de fondos antiguos. Una buena parte de la historia de México está aquí, desde la época colonial.
Durante su discurso, narró una historia fiscal, desde los registros en tabletas de arcilla de los asirios, las tablas de sal que les pagaban a las legiones romanas de soldados, incluso hasta las almendras de cacao que atesoraban los tlatoanis en el México prehispánico.
Los impuestos están en el origen de las civilizaciones y de los estados, la construcción de los antiguos imperios de Egipto, Asiria, Roma, China o México, dependieron del establecimiento de sistemas fiscales de diferente grado de complejidad. Son los primeros ejemplos de escritura humana, afirmó.
Celebró que la biblioteca Lerdo de Tejada ha servido como punto de referencia y de consulta durante decenios. Me consta la utilidad de los fondos. Algunos de ellos, propiamente de hacienda, son únicos, como colecciones de memorias, boletines que permiten la reconstrucción de una parte importante de la hacienda y dos siglos de historia.