IBM banking equipment

In the late 1960s banks began exploring branch automation as computers became more economical and terminal technology evolved. This adoption accelerated during the 1970s and IBM viewed this as a major business opportunity. In 1976, in the USA alone, they identified 14,000 commercial banks, 5,100 savings and loan associations and 500 mutual savings banks as targets for this technology. == IBM 3940 Terminal ==

IBM Hursley began developing the IBM 3940 in 1964. Bank staff used these terminals to produce paper tape transaction records which were then sent to the head office by van or transmitted over modem lines.. There was a model 1 and a model 2. Terminals were sold to a number of UK banks including Lloyds, Barclays and National Provincial Bank. The terminal was a desk-height cabinet with a modified typewriter on the left for data entry and a punch tape machine on the right that outputted the tapes. == IBM 3980 Bank Teleprocessing System ==

This terminal based banking system was used by several banks in the United Kingdom as part of initial branch computerisation. Bank branch staff could use the equipment to enter customer transactions directly into the central computer through terminals attached to a form of mini-computer called a concentrator. IBM Hursley UK developed the system and manufactured it at their Greenock plant in Scotland. Development began in 1967. Halifax Building Society was reported in 1976 as having connected 250 of their 3982 terminals using 24 x IBM 3981 concentrators to an IBM 370/145 mainframe. The Bank of Scotland was quoted in 1978 as saying they had 400 x IBM 3980 terminals attached to two IBM 370/158s. The 3980 system consisted of the following components: IBM 3982 Keyboard Terminal A data entry terminal, sometimes called a printing terminal that attaches to an IBM 3981. It was released in models 1 and 2. It is a teletype-like terminal integrated into a desk. == IBM 2730 Transaction Validation Terminal ==

IBM announced the 2730 model 1 on February 24, 1971 as part of one of the first Magnetic Credit Card Service Centres in the world. The 2730 was a terminal designed to read magnetic stripe cards at point of sale. It has a keypad with 12 keys and a selling price of $515 USD. As an example, in the early 1970s, First Federal Savings & Loan Association of Lincoln, Nebraska deployed IBM 2730 terminals in two Hinky Dinky supermarkets, allowing customers to make deposits and withdrawals or pay for purchases on the spot without visiting a bank branch which at the time was very novel. The customer needed a magnetic stripe card which the store operator would swipe through a reader along with the store's own authorisation card. They would enter a pass code and transaction code, and the terminal would transmit the request over a dial-up line to the bank's IBM System/370 Model 135, which verified the account, generated a one-time validation number, and communicated the approval back via audio response. It was described as one of the first of its type in the USA, allowing the supermarket to debit a customer account directly at time and point of sale without using cash or a cheque. == IBM 3670 Brokerage Communication System ==

While not targeted specifically at banks, the IBM 3670 product system was a finance industry specific offering aimed at brokerage firms. Announced on 21 September 1971, It consists of a number of products: • IBM 3671 Shared Terminal Control Unit. The control unit can attach up to 12 applications-oriented executive consoles and 12 data displays, expandable to 24 executive consoles and 24 ·data displays with the Display Expansion feature. A Printer-Keyboard Attachment feature allows attachment of up to 8 printer-keyboards. It holds the distinction of being the first IBM device that was announced with the new highly successful 8 inch "Igar" diskette drive that IBM had developed in its Boulder lab, internally referred to as a 33FD, although it then eventuated that the IBM 3740 was the first IBM product that actually shipped with one in May 1973. • IBM 3672 Executive Console. A large keyboard with 178 keys that offer a significant number of stock trading related functions. • IBM 3673 Data Display. A CRT desk-top display that can present 1200 characters, in a format 40 characters wide by 30 lines high. • IBM 3674 Printer-Keyboard. A modified multi-purpose IBM Selectric typewriter that can be used as a printer, a data entry device and as a typewriter. The system is designed to allow branch offices of a brokerage firm to make inquires, enter orders, and perform record keeping through a control unit remotely attached to an IBM System/360 or IBM System/370. All products were withdrawn on 14 April 1975. == IBM 2984 Cash Issuing Terminal ==

The IBM 2984 Cash Issuing Terminal was designed at the request of Lloyds Bank, who branded it a "Cashpoint". It was developed by IBM Hursley in the United Kingdom using hardware initially designed by IBM in Raleigh NC. Installations began in 1972 and by 1978, Lloyds had deployed 670 terminals. They reported at the time they were using them to process over 200,000 paperless withdrawals per week totalling approximately five million pounds in cash. The terminal accepted bank issued cards and required customers to enter a personal identification number (PIN), which at the time was a relatively new authentication method for consumers. The PIN and account data encoded on the card's magnetic stripe were transmitted to the bank's host computer for validation. The term "Cashpoint" became so widely adopted that it entered common usage in England as a generic word for any ATM. The encryption system used in the 2984 was derived from a cipher algorithm created by IBM cryptographer Horst Feistel. Lloyds Bank executives were worried about the banks confidential data being read by wire-taping of the phone lines being used by the 2984, so researchers in IBM's Systems Communications Division adapted this algorithm so that each transaction's dispensing commands varied unpredictably, preventing attackers from recording and replaying instructions. According to IBM this encryption work became the basis for IBM's subsequent entry into the commercial cryptography market during the 1970s. == IBM 3600 Finance Communication System ==

The IBM 3600 Finance Communication System was announced on 10 August 1973 and was an early example of an integrated network of banking devices. The system combined a branch computer controller with a family of devices such as banking terminals, printers and ATMs all connected via a loop-based communications architecture. The system was developed at IBM's Systems Communications Division (SCD) in Kingston, New York with support from the IBM Advanced Systems Development Division, Los Gatos and the IBM San Jose Special Engineering operation. The 3600 was announced alongside other IBM vertical industry systems, including the IBM 3650 Retail Store System, the IBM 3660 Supermarket System, and the IBM 3790 communications system, the combination of which IBM described as a "revolution in terminal based systems". The 3601 also allowed branches to continue computer processing of transactions in an offline manner. This combination of on-line real-time processing with off-line data entry increased operational efficiency for financial institutions and helped establish networked branch banking. The following devices were announced as part of the 3600 system: There were seven models: • Model 1 announced 10 August 1973 and withdrawn August 1987. Document Printers A variety of printers were released to create hard-copies of banking transactions, print updates into banking passbooks and print on a journal roll. They all offer a shared terminal feature printer that allows the printer to be shared between two bank terminals using push buttons. Models include: • Model 1 prints on cut forms only • Model 2 prints on cut forms and also has a journal/audit roll • Model 3 prints on cut forms and on fanfold paper. • Model 4 prints on cut forms and also has a journal/audit roll IBM 3611 Passbook printer A compact table-top printer for printing passbook updates using a print wheel. It was designed to fit into the minimum amount of space and could have a 3604 placed on top of it. IBM 3621 Self-service Statement Printer A fast matrix printer. There are three models B01, B02, and B03. It is a medium-speed line printer for volume output. It prints onto continuous fanfold paper, printing 8-inch lines with 80 print positions, expandable to 13.2-inch lines with 132 positions using the Expanded Print Line special feature. Consumer Transaction Facilities Two ATM devices were announced as part of the 3600 system. The terminal can be loop connected to a 3601 located in a bank branch or can connect to a bank's central mainframe computer via telephone lines, which allowed financial institutions to deploy 3614s well beyond traditional branches — including supermarkets, department stores, and other high-traffic retail locations. This enabled banks to extend their reach beyond bank branches, while retail outlets benefited from customers having ready access to cash. Four models of the 3614 are available: Models 11 and 12 can dispense two denominations (such as $5 and $10 notes), although banks could also use this to store twice as many bills of the same denomination. The through-the-wall models (2 and 12) use a protective window equipped with a safety clutch, which covers the access area (except the card slot). This opens when a card is inserted and closes 25 seconds after the last transaction is made. The 3614 was withdrawn from marketing on 9 March 1981. IBM 3624 Consumer Transaction Facility The IBM 3624 was released in 1978 as a second-generation automatic teller machine (ATM) as a successor to the IBM 3614. Designed at the IBM Los Gatos lab, the IBM 3624 was manufactured at IBM facilities in Charlotte, North Carolina and Havant, England. The 3624 is a self-service terminal that issues variable amounts of currency, accepts deposits, and performs other financial transactions. It was designed for IBM 3614 family compatibility, allowing coexistence with existing 3614 installations on the same loop and simplifying the transition between the two products. The dual-feed models (11 and 12) can issue two different denominations in a single transaction, or load the same denomination in both dispensers to double the cash capacity. Documents other than currency, such as traveller's cheques, can also be dispensed. The machine issues up to 20 bills at a time in a single stack with no pre-packaging. One of the most lasting features introduced with the 3624 was the IBM 3624 PIN block format used in transmission of an encrypted personal identification number (PIN). The 3624 uses the U.S. Federal Information Processing Data Encryption Standard (DES) algorithm for encryption of sensitive data during communication line transmission. The encryption modules required for the 3600 Host Support program were designated BQKDES and BQKDPRS; source listings were not orderable and were not supplied with these modules. == IBM 4700 Finance Communication System ==

The IBM 4700 Finance Communication System was announced on 14 September 1981 as the successor to the IBM 3600 Finance Communication System. Like the 3600, it centres on a programmable branch controller (the IBM 4701) which manages a family of teller and administrative terminal devices connected via a loop-based communications architecture. The 4701 communicates with a central IBM System/370, IBM 4300, IBM 8100, or IBM System/34 host processor — typically through an IBM 3704 or 3705 Communications Controller — using the Synchronous Data Link Control (SDLC) protocol at speeds up to 9,600 bit/s. Backward compatibility with the 3600 was a central design priority. Both systems can coexist on the same host communication link, and 3600 terminals, including the 3604 Keyboard Display, the 3610 and 3612 printers, and the 3624 Consumer Transaction Facility can attach directly to a 4701 controller loop alongside newer 47xx devices. With minor modification, 3600 application programs run unchanged on the 4701. The 4700 also introduced a distributed information system capability: a 4701 controller equipped with the optional fixed-disk storage feature can store and process branch-specific data such as account records, interest rate tables, ATM positive and negative account files independently of the host computer, reducing communication costs and shortening response times at remote branches. Products in the system included: Both 4701 models 1 and 2 include 192 KB of base controller storage (expandable in 64 KB increments to a maximum of 512 KB), an integrated diskette drive, hardware-based Data Encryption Standard (DES) encryption, and a host-computer attachment using SDLC. A software-based system monitor, loaded from diskette, controls operating functions and accepts commands from an attached 4704 display station, replacing the hardware control panels of earlier controllers. the IBM 4723 Finance Communication Document Processor is a small desktop reader and inscriber that attached to IBM 3600 or IBM 4700 Banking controllers and is loop connected. It was developed by the IBM Nordic Laboratory in Lidingoe Sweden and manufactured by IBM in Greenock, UK. == IBM 473x Personal Banking Machines ==

On 6 December 1983, IBM announced a new family of ATMs designated the IBM 473x series, marketed as "Personal Banking Machines" (PBMs). Models included: • IBM 4730 — Personal Banking Machine (1983) • IBM 4737 — Self-service transaction station The 473x series of ATMs proved to be a commercial failure, partly because while the 4700 controllers could support the 3624, 473x machines could not be attached to existing 3600 controllers which remained in use at many bank branches. This meant that prospective 473x buyers would have needed to replace their 3600 controllers with 4700 controllers to adopt the new machines. Connected to an System/370 host computer, the 4730 can accept cheque deposits without deposit slips, deliver cash against pay cheques, adjust account balances, and dispense exact change including coins. The coin-dispensing capability was later discontinued as the feature proved costly and saw little customer use. The customer-facing interface features a positive-image CRT display with 480 characters arranged in 12 lines of 40, fitted with a limited-angle privacy filter restricting the viewing angle to 24 degrees either side of centre. Eight display selection keys flank the screen, and the standard consumer keyboard provides 16 keys in a 4 × 4 layout; an optional 32-key extended keyboard is available for institutions already using the same layout on the 3624, 4730, or 4736. It can be installed free-standing, built into an interior wall, or set into a teller counter. Key features include: • Touch-sensitive colour display screen • Keyboard • PIN pad • An integrated IBM Personal System/2 Model 30 An application development toolkit was announced alongside the 4737, intended to help software developers produce new packages to run on the terminal. This toolkit approach reflected a shift from the fixed-function design of the earlier 473x ATMs toward a more flexible, software-defined platform aimed at the emerging self-service kiosk market. == InterBold and the IBM 478x series ==

After the failure of the 473x series, IBM effectively exited the proprietary ATM design business. In July 1990, IBM and Diebold, Incorporated announced a joint venture called InterBold, headquartered in North Canton, Ohio. Diebold held a 70 percent ownership stake and supplied the ATM hardware, while IBM contributed software development, systems integration capabilities, and its international marketing and distribution network. The ATMs sold by IBM under the InterBold arrangement were designated the IBM 478x series and were rebadged versions of the Diebold 10xx (Modular Delivery System) family. Not all Diebold 10xx models were offered under the IBM brand. Within a year of the venture's formation, InterBold introduced the "i Series" ATM refresh in 1991, which was the first ATM model to use "image-lift" technology, allowing customers to see an image of deposited cheques on the ATM screen. The i Series machines were guaranteed to perform 99 percent of the time and included features such as stamp dispensing, account statement printing, and improved accessibility for disabled users. In July 1997, IBM exercised an option to sell its 30 percent minority ownership in InterBold to Diebold. After the two companies were unable to agree on a price, the matter was referred to a third party. The InterBold partnership was formally dissolved on 19 January 1998, when Diebold completed the purchase of IBM's share for $16.1 million. The dissolution of InterBold marked the end of IBM's direct involvement in the ATM market. The Diebold 10xx platform, which had been sold under the IBM 478x designation, continued in production and was eventually replaced by the Diebold Opteva series of ATMs in 2003. == Legacy ==

Although IBM's post-3624 ATM hardware was commercially unsuccessful in its own right, the company's influence persisted in the broader ATM industry. The IBM 3624 PIN block format remained an industry standard for PIN encryption long after the hardware was discontinued. Many later ATMs, including those produced through the InterBold partnership, ran OS/2, IBM's own operating system. The IBM 3624's communications protocols and design concepts were sufficiently influential that competitors, most notably NCR, built successful ATM product lines in part by duplicating or emulating aspects of the 3624 architecture. == See also ==