Databank Systems

~ the eulogy ~

Databank Systems Limited was incorporated in Wellington in 1967 and sold to Electronic Data Systems in 1994, and nobody has published a day or a month for either end of it. The sale was reported by American Banker on 1 June 1994 in the past tense: "Plano, Tex.-based EDS has purchased Databank from a group of New Zealand banks for an undisclosed sum." That is the tightest bracket available: Wikipedia gives the year and stops, and the trade report gives only its own dateline.

The New Zealand Commerce Commission had to clear the sale, and its file is the plainest surviving description of what was being bought. Databank was a not-for-profit company owned by banks that competed with each other on the high street and pooled their computing anyway. In 1967 the Bank of New Zealand held 40 percent, the National Bank 20, ANZ 20, and the Bank of New South Wales and the Commercial Bank of Australia 10 each. After the two Australian parents merged in the eighties the split became BNZ 40, NBNZ 20, ANZ 20 and Westpac 20. The teaming-up had started a year earlier still, in 1966, between the BNZ and the National Bank.

By the time EDS bought it the company had about 950 people and roughly $50 million in revenue in its last year as an independent business. It ran the settlement systems for four banks that between them held around 70 percent of New Zealand's banking assets, and all four stayed on as customers of the buyer. Coley Clark, an EDS corporate vice president, framed the purchase as a regional foothold: "We feel that in addition to the United States market there is a lot of opportunity for us outside the country."

Nothing in this touches the web I grew up on. A bank-owned processing utility in Wellington had already been sold before I had an email address, and the people whose accounts it processed dealt with their own bank's name instead. Turkey built the same idea later and narrower: Bankalararası Kart Merkezi was registered on 20 August 1990 by thirteen Turkish banks to run the card authorization and clearing that nobody wanted to build thirteen times over. Databank had been doing the bank-account version of the same job since 1967, and it was sold four years after BKM opened. Domestic card payments at home still clear through a company with that shape.

~ the dossier ~

~ the mainframe the banks shared ~

The first machine was an IBM System/360 Model 40. The Master Transaction System went in during February 1969, and by November of that year every branch of every trading bank in New Zealand was being processed by computer. The conversion took ten months and the company doing it was two years old.

Within twelve years of 1967 Databank was the largest non-government data processing organization in the Southern Hemisphere, servicing more than 1,200 banking offices. It had also drifted well outside banking. A commercial services arm was taking about a quarter of turnover by then, selling data processing to New Zealand businesses, and the company ran a Portran service for schools. Portran was Portable Fortran, and the offer only makes sense in a decade when a school with programming ambitions rented time on somebody else's mainframe.

Shared infrastructure is invisible by design, and the one day anybody looks straight at it is the day it changes hands.

~ what the banks kept ~

The banks kept their own names on the doors and gave up the thing underneath them. EDS was in 33 countries by then and wanted the Asia-Pacific base. The Commerce Commission recorded that in its own flat language: "The proposed acquisition of Databank Systems Ltd is in line with Electronic Data Systems Corporation's strategic plan for the Asia/Pacific area." Databank Investments Ltd, the subsidiary, went with it in the same job lot. One number in the American Banker report has not survived the typesetting: EDS officials said they expected the deal to generate "at least $350 in revenue over the next five years", with no unit printed anywhere in the sentence.

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