Saturday, September 15, 2012

Bank in a Box Software Project

Years ago I suggested that Texas should be a financial center.  If it were easier to start a bank, we might start more banks in Texas, some of which could grow to become strong banks.  Strong banks will increase prosperity in Texas.  A set of readily available software systems, a bank in a box, could make it easier to start a bank.  The term bank-in-a-box has been around for a long time.  I propose a well organized, well designed and documented open source bank-in-a-box project would be a great benefit to Texas and America.

The variations in banking are wide.  At the large end, the U.S. government or the Federal Reserve should be able to use the bank-in-a-box software set to immediately open new banks to loan money to businesses in order to keep the economy operating when large numbers of banks freeze loaning during a banking crisis, as happened in the 2008 meltdown.  The Federal Reserve poured money into existing banks, which was a waste of money because the banks sat on the money and did not loan it.  The American economy had a heart attack when the money quit flowing.  The Fed did everything it could think of except open banks for direct loans to businesses.

In good times the U.S. Government could practice emergency bank-in-a-box deployment the same way city and state governments practice for emergencies.  I believe it would be possible, with practice, to go from zero to granting loans within a week.

At the small end of the spectrum, individuals who are fed up with high banking fees and poor service should be able to start their own personal banks.  Individuals should be able to accept direct deposit, make electronic payments, and use their own debit card through a clearing house.  Some people are already doing this as described in the Wall Street Journal article, "Footnote to Financial Crisis: More People Shun the Bank" by Gary Fields and Maya Jackson-Randall, September 12, 2012, page A1.

Open Source Software

Long term development of a bank-in-a-box software set is well suited for open source software development.  Large collaborative efforts like the GNU/Linux operating system have been very successful.  A bank-in-a-box software project would benefit from collaborative development.

The main sources of Open Source Software are Sourceforge and Github.  The user interface for Sourceforge is more intuitive.  I will caution the reader that if you are not familiar with the Git system for source code management, then Github will be have a steeper learning curve if you plan to actually download software.  There is no real activity on Github for banking at this time, so that is not a a problem.

You can easily browse both websites to see what is available for banking.  Sourceforge reports that the software project called Bank management system has (at this time) an average of 42 downloads per week.  The project is described as a simple example for bank system with different operations.  This sounds like a learning tool, but is a good starting point for exploring banking sofware.  There are other banking projects that seem to lack popularity.

The most popular banking software on Sourceforge is Gnucash, a personal and small-business finance manager.  It reports 16,805 weekly downloads.  Gnucash has a check-book like register GUI to enter and track bank accounts, stocks, income and expenses. GnuCash is designed to be simple and easy to use but still based on formal accounting principles.  This looks interesting on a personal level, but is not a bank-in-a-box.

There is a company called MyBanco that has an open source software solution.  This looks promising.  They appear to be ready for business in America and Australia.

Open source bank-in-a-box software should be a priority for the people of Texas.  A bank-in-a-box software project would strengthen banking and improve software development in Texas.  A bank-in-a-box software project could improve the prosperity of Texas.  Any state would benefit from starting or participating in a bank-in-a-box project.

Robert Canright

The Bank in a Box Software Project is part of the Texas Software Initiative