Bankers Trust Corp. will roll out a computer system for delivering account information to global custody clients this year.
Like the workstations offered by bigger custodians, the BT Client system would provide on-line access to account information.
Historically, banks have installed software directly onto the computer networks of their custody and institutional trust clients, who retrieved information and processed it on-site. Today banks are using the Internet to send clients live information that is processed internally.
"Because of the complicated nature of the software, it requires clients to have a lot of memory and hardware requirements," said Subir Chatterjee, a Bankers Trust vice president who is product manager for BT Client.
"Overall, the installation time as well as our capability to roll out new products will be enhanced" by Internet information delivery, he said.
He added that the priority is to "keep pace with the technology." The global institutional services division of Bankers Trust has a $250 million technology budget.
To install the system on more than 1,000 computers in clients' offices, bank employees will fan out around the world over the next several months. Upgrades, however, can be done remotely.
Bankers Trust has $2 trillion of assets under custody. BT Client is designed to process account information for custody clients and trust clients.
There is no charge for receiving information from BT Client, which is encrypted as it travels on-line.
Upcoming events such as the currency conversion in Europe and the need for computers to accept information for the year 2000 have spurred global custodians to upgrade their systems.
Chase Manhattan, which has $3.7 trillion of assets under custody, is gearing up to offer Workspace, a Web-based service, to custody accounts this summer. The system is currently used by cash management accounts.
However, the Bankers Trust and Chase systems still lag the competition. Bank of New York custody clients have had access to a similar Web-based browser to account information since November 1996. Mellon Bank Corp. also introduced an on-line account server that year, as did State Street Corp. in 1995. Mellon has $1.5 trillion of assets in custody and master trust accounts, and State Street has $4.4 trillion.
Bank of New York has $4.2 trillion of assets under custody and has a technology budget of more than $250 million a year.
"This is a weapons race. That's what causing less and less of us to be in the marketplace," said Kurt Woetzel, senior vice president of securities processing technology at Bank of New York.
"Technology is the weapon that affords you the opportunity to be successful or not. Technology raises the barrier to entering into this market," he added.
Acquisitions in recent years have made Bank of New York, Chase, and State Street the leading custody banks, and Bankers Trust has made a commitment to expand in the business.
Last year Bankers Trust boosted assets under custody by $133 billion - buying the institutional trust businesses of the former Boatmen's Bancshares and its acquirer NationsBank Corp.
"This clearly has been targeted as a business where we have excelled," Mr. Chatterjee said. "We still feel we are very competitive in this business-we have a good client base we can continue to expand on."
