‘New’ Business Paradigms, Part One—The Clearing House:
In the 1820s in London there was only one large-scale information processing
model: it was the Banker’s Clearing House in the City of London. To
facilitate the processing of checks, which were beginning to be more widely
used, each bank had a “walk clerk” who walked each check back to the bank of
its origin for cash. Eventually, because of the quantity of checks, the walk
clerks decided to meet in one location. In 1830 the Bankers’ Clearing House
was built in the heart of London to accommodate this burgeoning ‘information
processing technology.’
We still have the remnants of this concept in the Fed’s ACH, Automated
Clearing House, a method for handling checks by transporting them to one
location for digital processing. Even though the money is transferred
electronically, the structural model for this technology, as reflected in its
name, is based in the physical world—in the history of clerks walking checks
from bank to bank.
When will we realize that (overcoming) physical distance no longer needs to
be the basis for our information processing paradigms? When will we be truly
able to understand the possibilities that the network paradigm—real time
processing, no geographical limitations—provides?
