System and method for measuring and utilizing pooling analytics

• US 8,577,770 B2
• Filed: 07/23/2012
• Issued: 11/05/2013
• Est. Priority Date: 03/01/2001
• Status: Expired due to Term

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Beard, Mark L
• Primary Examiner(s): Ebersman, Bruce I
• Application Number:
  US13/555,497
• Publication Number:
  US 20120317020A1
• Time in Patent Office: 470 Days
• Field of Search: 705 1- 50
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

A system and method for quantifying the working capital benefit of pooling a number of separate cash accounts. The average (mean) cash balance of the pooled account is determined to be the sum of the means of each of the individual accounts. Similarly, the standard deviation of the pooled account is determined to be the square root of the sum of the squares of the standard deviations of the individual accounts. Accordingly, the minimum cash level of the pooled account is 2.3 times the square root of the sum of the squares of the standard deviations of the individual accounts. If pooling is to be beneficial, from a working capital perspective, the minimum cash required in the pooled account will be significantly less than the aggregate cash required by the separate companies.

Claims

1. A computer-implemented method, the method comprising:

identifying two or more separate cash accounts;

receiving daily balance data for each of the two or more separate cash accounts based on a cashflow for each of the two or more separate accounts, wherein the daily balance data comprises a cash balance and is based on a period of time comprising three months and wherein further the cashflow into each of the two or more separate accounts approximates a normal distribution;

determining a separate minimum cash balance required in each of the two or more separate cash accounts;

determining, by an information processor, historical data related to each of the two or more separate cash accounts wherein the historical data is based at least in part on the received daily balance data;

determining, by the information processor, statistical characteristics of each of the two or more separate cash accounts based at least in part on the historical data; and

determining, by the information processor, separate minimum cash balances required in each of the two or more separate cash accounts based at least in part on the statistical characteristics.

2. The method of claim 1, further comprising:

aggregating the separate minimum cash balances into an aggregated minimum cash balance; and

determining a benefit of pooling the two or more separate cash accounts into a single pooled account based at least in part on the aggregated minimum cash balance.

3. The method of claim 1, wherein the two or more separate cash accounts are each associated with one or more of a group of related companies.

4. The method of claim 1, wherein the historical data further comprises the cash balance in each of the separate cash accounts for a predetermined period of time.

5. The method of claim 1, wherein determining the statistical characteristics of each of the separate cash accounts comprises:

multiplying a standard deviation of the cash balance in each of the separate cash accounts by 2.3.

6. The method of claim 1, wherein determining separate minimum cash balances comprises:

2.3×

{S(1), S(2), . . . S(n)}, wherein n is the number of separate cash accounts and S(x) is a standard deviation of the cash balance in any one of the separate cash accounts.

7. The method of claim 2, further comprising:

determining a pooled minimum cash balance required in the single pooled account.

8. The method of claim 7, wherein determining the benefit of pooling comprises determining a difference between the aggregated minimum cash balance and the pooled minimum cash balance.

9. The method of claim 8, further comprising:

pooling the separate cash accounts into the single pooled account when the pooled minimum cash balance is less than the aggregated minimum cash balance.

10. The method of claim 9, wherein the benefit of pooling comprises a reduction in an interest expense.

11. The method of claim 9, further comprising:

determining a reduction in an interest expense as part of the determined benefit of pooling.

12. The method of claim 1, further comprising:

receiving a currency set of each of the two or more separate cash accounts; and

receiving interest spreads for each of the two or more separate cash accounts.

13. The method of claim 2, wherein determining the benefit of pooling comprises determining a reduction in minimum cash level by calculating the difference between a minimum cash level without pooling and a minimum cash level with pooling.

14. A computer-implemented method, the method comprising:

identifying two or more separate cash accounts;

determining a separate minimum cash balance required in each of the two or more separate cash accounts;

receiving a currency type in each of the two or more separate cash accounts;

receiving interest spreads for each of the two or more separate cash accounts;

determining, by an information processor, historical data related to each of the two or more separate cash accounts;

determining, by the information processor, statistical characteristics of each of the two or more separate cash accounts based at least in part on the historical data, the currency type and the interest spreads; and

determining, by the information processor, separate minimum cash balances required in each of the two or more separate cash accounts based at least in part on the statistical characteristics.

15. A computer-implemented method, the method comprising:

identifying two or more separate cash accounts;

determining, by an information processor, historical data related to each of the two or more separate cash accounts;

determining, by the information processor, statistical characteristics of each of the two or more separate cash accounts based at least in part on the historical data;

determining, by the information processor, separate minimum cash balances required in each of the two or more separate cash accounts based at least in part on the statistical characteristics;

aggregating the separate minimum cash balances into an aggregated minimum cash balance; and

determining a benefit of pooling the two or more separate cash accounts into a single pooled account based at least in part on the aggregated minimum cash balance,

wherein determining the benefit of pooling comprises determining a reduction in minimum cash level by calculating a difference between a minimum cash level without pooling and a minimum cash level with pooling.