System and method for determining optimal sweep threshold parameters for demand deposit accounts

In a financial institution accounting system, a method of determining an optimal sweep threshold parameter for a demand deposit account (DDA), said DDA having a sub-DDA contra-account and a sub-money market account (sub-MMA) associated therewith, said method comprising the steps of:

• (a) setting a trial sweep threshold parameter equal to a value that is a function of an activity of said DDA during a historical period of time;
• (b) performing a trial sweep process on said DDA during said period of time, a timing of sweeps from said sub-MMA to said sub-DDA occurring during said trial sweep process being a function of said trial sweep threshold parameter;
• (c) repeating said step of performing with a modified trial sweep threshold parameter until modification of said trial sweep threshold parameter fails to produce an increase in an average balance of said sub-MMA for said predetermined period of time, said trial sweep threshold parameter thereby determined to be an optimal sweep threshold parameter for said DDA;
• and
• (d) employing said optimal sweep threshold parameter in said financial institution accounting system to determine a timing of prospective sweeps to occur in said DDA.

An automated accounting system for managing demand deposit accounts (DDAs) of a financial institution, each of said DDAs having a sub-DDA contra-account and a sub-money market account (sub-MMA) associated therewith, said accounting system comprising:

• data storage that contains ongoing activity data pertaining to each of said DDAs;
• processing circuitry that performs an ongoing sweep process on said DDA to move funds from said sub-MMA to said sub-DDA as a function of a balance of said DDA and an optimal sweep threshold parameter;
• and
• a system, executable in said processing circuitry, that determines said optimal sweep threshold parameter, including:
• an initialization routine that sets a trial sweep threshold parameter equal to a value that is a function of an activity of said DDA during a historical period of time, and
• a trial sweep routine that performs a trial sweep process on said DDA during said period of time, a timing of sweeps from said sub-MMA to said sub-DDA occurring during said trial sweep process being a function of said trial sweep threshold parameter, said sweep routine repeated with a modified trial sweep threshold parameter until modification of said trial sweep threshold parameter fails to produce an increase in an average balance of said sub-MMA for said predetermined period of time, said trial sweep threshold parameter thereby determined to be an optimal sweep threshold parameter for said DDA, said processing circuitry employing said optimal sweep threshold parameter in performing said ongoing sweep process on said DDA.

A method of operating an accounting system to manage demand deposit accounts (DDAs) of a financial institution, each of said DDAs having a sub-DDA contra-account and a sub-money market account (sub-MMA) associated therewith, said method comprising the steps of:

• storing ongoing activity data pertaining to each of said DDAs in data storage;
• employing processing circuitry to perform an ongoing sweep process on said DDA to move funds from said sub-MMA to said sub-DDA as a function of a balance of said DDA and an optimal sweep threshold parameter;
• and
• determining said optimal sweep threshold parameter by:
• (a) setting a trial sweep threshold parameter equal to a value that is a function of an activity of said DDA during a historical period of time,
• (b) performing a trial sweep process on said DDA during said period of time, a timing of sweeps from said sub-MMA to said sub-DDA occurring during said trial sweep process being a function of said trial sweep threshold parameter, and
• (c) repeating said step of performing with a modified trial sweep threshold parameter until modification of said trial sweep threshold parameter fails to produce an increase in an average balance of said sub-MMA for said predetermined period of time, said trial sweep threshold parameter thereby determined to be an optimal sweep threshold parameter for said DDA;
• and
• employing said optimal sweep threshold parameter in performing said ongoing sweep process on said DDA.