Aiming at greater efficiency, the two world banks, Citibank and HSBC, are introducing a single platform for their legacy payment. HSBC is striving to meet the European Union’s demands for low-cost cross-border payments between EU member states and is opening three major processing centers in the US, the UK and in Hong Kong. Citibank has launched its UK processing center, with another center in Frankfurt, Germany, to go live this year, ahead of further center launches in the USA and Asia during 2006.

In 2005, North American banks will spend about USD 1.1 billion on real-time payment processing software, hardware and services, according to TowerGroup. Payments constitute the core basis of value-added services such as treasury management, and global banks such as Citibank and HSBC are enhancing their payments ‘store window’ and services by moving to a single platform, according to IT-Analyses.com. From an infrastructural viewpoint, banks are forced to integrate disparate systems to reduce payments risk while improving efficiency and regulatory compliance.

Banks can also use open systems architectures and automated straight-through-processing (STP) to get higher fee income and deliver value-added services with pricing flexibility. In 2005, banks will give preference to operational savings (27 per cent), increased revenues (27 per cent) and improved customer service (26 per cent), according to a recent survey by solutions firm Fundtech. About 54 per cent of the survey respondents said they are focused on STP rates between back-offices and banks’ daily operations, while 69 per cent confirmed that their IT budgets would grow in 2005.