But the cash management efforts announced this week by Citigroup Inc. and Bank of America Corp. are among the biggest projects to date to take advantage of service-oriented architecture, as the format is known. Analysts say that as the technology becomes more widely used it could improve banks' abilities to connect their systems to those of their corporate customers — and to each other.
Citi announced its CitiDirect BE (for "banking evolution") cash management platform, which includes such advanced online capabilities as user-generated content and a video channel. Technology executives often refer to this type of collaborative Internet feature as Web 2.0.
B of A, of Charlotte, said it is developing a payments hub that it expects to handle transactions for a wide range of cash management customers, domestic and international, from small and midsize businesses to large corporate and trust clients. Both companies made their announcements in Hong Kong, where the global financial cooperative Swift is holding its annual Sibos conference.
Jacob Jegher, a senior analyst at the Boston market research firm Celent, said the announcements were a sign that banks are seeing wider benefits in service-oriented architecture and are beginning to embrace the user-friendly capabilities of Web 2.0 applications.
"This is a way to enable the bank to offer a better customer experience on the front end by having better piping on the back end," he said.
By tackling the "quagmire of legacy systems," the new technologies open the way for bankers to be a financial information resource for their clients rather than simply the executor of transactions, Jegher said. "It's a testament to where the Web has gone."
A key goal of service-oriented architecture is developing modular blocks that offer discrete functions and can be easily plugged into a bank's systems depending on what features are desired.
Gary E. Greenwald, the global head of capabilities and information products in Citi's global transaction services unit, said CitiDirect BE delivers capabilities beyond transactions and financial reporting.
"We've used a modular design to create a flexible portal," he said.
The portal is available now to more than 300,000 users worldwide, mostly multinational corporations, along with government agencies and small and midsize businesses in some markets.
Milton Santiago, the senior vice president of portal strategy and the treasury e-commerce solutions executive in the B of A Merrill Lynch global treasury and wealth management unit, said the sprawling financial services company expects to use the payments hub to streamline its internal systems.
"We are one organization, and we will have one payment-processing platform," Santiago said. "We can consolidate multiple platforms that we operate from," he said, including those of Merrill Lynch & Co. Inc., which B of A bought on Jan. 1. Santiago joined B of A when it bought LaSalle Bank Corp. in Chicago from ABN Amro Holding NV of Amsterdam in 2007.
The hub is designed to support consistent processing for all payments regardless of channel, including payments initiated online or by telephone, Santiago said. "The hub will be the router between all those channels."
B of A said it is building its payments hub using the Global PAYplus Services Platform from Fundtech Ltd. in Jersey City, which also announced the product at the Sibos conference. Santiago said B of A's online suite of services would be available in the first half of 2010.
