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Friday June 25, 05:51
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Check 21 A Catalyst For Banks To Integrate Data
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US banks are predicted to spend USD 13.5 billion to USD 16 billion on re-engineering their payment processes between 2005 and 2007, with enterprise systems a particular focus for top-tier banks. Check 21 compliance will be a big incentive for banks to centralize payment information and to redesign internal systems to serve customers over multiple channels. Traditionally siloed payment systems are irrelevant in today’s multi-channel banking environment and as such, reducing the number of back-office processes to create a centralized architecture for electronic payments and data, leads to new operational efficiencies.
Check processing systems for instance are under conversion from silos unable to supply intraday data to other banking systems, to centralized archives that share captured check data as necessary, and support day two adjustments (such as exceptions) to the same data. Cash management is another emerging area for bank technology spending, with Bank One seeking to tap the middle market with Microsoft’s Great Plains ERP solution. The middle market for cash management is worth USD 20 billion to USD 500 billion, and Bank One and Microsoft are seeking to harness their synergies by helping clients to optimize their existing technology projects.
Automated cash management enables enterprises to simplify electronic and check payments, collections and receivables processes, with full reporting functions. While increased revenues are a catalyst for banks to invest in technology, Financial Insights noted in a March 2004 report that if banks want 2004 revenues to improve on last year’s 1.3 per cent growth, a ‘creative’ approach to the middle market is required. With small and midsize firms generating 50 per cent of revenue in the cash and treasury management market, Financial Insights is advising banks to integrate service channels for the delivery of new services and generation of profits.
(Bank Systems Online)
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