June 21, 2009

Investing in Portals

Even as budgets shrink at most banks, the major global players in particular seem intent on growing their treasury offerings. New York-based J.P. Morgan Chase ($2.2 trillion in assets), for example, pledged this past fall that it would invest $1 billion in its treasury services business. Even after the dramatic changes in the market, the bank continues to roll out new products and services to help its commercial clients operate more effectively. Aggressively helping clients work smarter and showing them the value of treasury services, say experts, is the key for banks as they look at ways to increase their treasury businesses and make money in a more thrifty world.

Bank of America is focusing its investment dollars on its CashPro Online portal, according to the bank's Newman. "This is a critical part of a successful banking relationship," he contends. "It speaks to the larger information transparency and liquidity issues. It's a solution for cash positioning and is the cornerstone of our liquidity transparency and management services."

BNY Mellon also continues to see a good response to its Liquidity DIRECT portal among its clients, reflecting the greater trend in the treasury management business, according to the bank's Briand. He notes that portals are gaining popularity as banks seek to offer clients a consolidated view of their cash and relationships.

Providing a holistic view of clients' accounts is exactly what Citi's TreasuryVision portal is designed to do, says the bank's Gupte, who adds that since this past September corporate treasurers have placed a greater emphasis not only on liquidity risk, but also on counterparty risk. "You would think spreading your money across multiple parties would be the best way to deal with this risk," he relates. "But you really have less control and visibility of who has the money and how long it has been there, and you may end up logging into multiple bank platforms to access your cash. TreasuryVision is a simple analytical tool that sits on the treasurer's desktop and receives feeds from Citi and other banks so you can get a picture of your total balance around the world, no matter how many accounts you have."

Electronification Gains Momentum

Another treasury management area in which banks are investing is document imaging and electronic payments, a push that started at the beginning of the decade. The strains of the economic crisis add more weight to the business case behind electronification, suggests BofA's Newman.

While full electronification is a way off for the industry, Newman relates, BofA is undeterred in its efforts here. "We are a long way from this being an industry norm because there are an awful lot of standards that need to be addressed and vendors need to sign on too," he acknowledges. Nonetheless the bank continues to invest in its PayMode service, which helps clients digitize payments and the associated documents, he reports.

Electronification is also a focus for BNY Mellon, according to the bank's Briand. "This is a big focus of ours," he says. "There's a lot of industry work occurring around building a common standard, which is key to leveraging these technologies. We want to use image exchange whenever we can with our bank partners. It's speedier and more efficient for all parties."

The endgame in treasury management, experts agree, is providing users with a streamlined experience that allows them to get things done more quickly while affording them a measure of control. According to KeyBank's Hazapis, the online channel will play a central role here and is the primary area in which the bank is investing. "We're definitely seeing more adoption in our online delivery channels," she says. "We have [a portal] for small business and one for midsize and large corporates. The penetration for both portals increased over the past six to nine months. So this is where a good portion of our development is going."

Similar to Citi's TreasuryVision, Key Business Online and Key Total Treasury offerings provide clients at small and medium-size enterprises and large corporates, respectively, a consolidated view of their data in what Hazapis claims is "almost real time." In addition the tools are constructed on an SOA framework so they're more modular in nature and utilize Web 2.0 technologies in order to provide clients with a more interactive experience, she relates.

Even at vendors like Fi-serv, solutions are being developed using Web 2.0 technologies to improve the client interface. "We want to help the banks give their clients greater access to data, so we're developing more self-service tools to push tasks to the corporate customer and enable more personalization of the user interface versus a more static presentation," explains Sam Robb, VP, global product management, with the Brookfield, Wis.-based technology provider.

According to Milton Santiago, global banking and wealth management portal and e-channel executive with Bank of America, interactive, Web 2.0-based features will differentiate banks' treasury offerings in the future. BofA, he reports, is looking at introducing podcasts and videocasts for its treasury clients. "It would [be] on a subscription basis. We'd offer timely information to different market segments that would be vertically focused," he explains. "The bank would use its ability to communicate as an adviser."

Santiago says the idea behind using Web 2.0 in banking is to simplify the user experience through richer content and more self-service options: "It comes down to how we implement it and work with the clients. The goal is not to reduce service but to enhance it so that when service is needed, it's exceptional. We want to be able to provide exceptional service up front so they can get as many questions [as possible] answered on the screen."