why do banks need an extra day to process paychecks after ‘bank holidays’ when almost everything is automatic/digital?

Question

why do banks need an extra day to process paychecks after ‘bank holidays’ when almost everything is automatic/digital?

In: 3758

Answer 1

In the old day, banks took all of their checks to a clearing house. Bank reps sat across the table from each other and passed ledgers back and forth to do the actual accounting for all the changes that occurred for the previous day. A bank holiday would delay this process by one day.

Basically due to tradition, we still follow that standard even though it’s now fully automated.