ADP Offering a PC Package For Resale to Midsize Firms
ADP Financial Network Services has introduced cash management software that banks can market to their midsized business customers.
The personal computer-based package offers more features than ADP's phone-based balance-reporting service and is expected to help users reduce costs.
Key Bank of Puget Sound, Seattle, a subsidiary of KeyCorp, Albany; Continental Bank, Philadelphia, a subsidiary of Midlantic Corp.; and People's Bank, Bridgeport, Conn., have tested the software for two months, offering it to selected customers on a trial basis. As yet, no bank has signed with ADP.
A Shift in Strategy
Facing slower growth among the Fortune 500, corporate bankers have begun targeting the middle market for new products and services. Chemical Bank and Chase Manhattan Bank, for example, offer similar software aimed at these companies that typically have annual revenues between $50 million and $500 million.
The ADP software, called Business Express/PC, allows a corporate customer using a personal computer to access account information provided by his bank and stored on an ADP computer.
The banks testing the software already offer an ADP service that allows customers to access account information by telephone, but the banks say many of their customers would prefer the Business Express product, which would allow them to do account reconcilement.
Customers can also do more types of transactions with Business Express, such as initiate automated clearing house transactions and overnight transfers of funds between accounts at different banks.
The software is available to banks immediately. ADP charges an average monthly rate of $50 for each corporate customer.
ADP processes information about the preceding day's commercial checking account activity, which is transferred electronically from the bank each day. ADP then manipulates the information, putting it in spread-sheet form, and produces a running statement.
Cost Savings Likely
Cameron McCaskill, cash management officer of People's Bank, said the software should substantially reduce its cost of providing cash management services. Some customers could see their monthly bills drop by $200 to $300, he said.
Mr. McCaskill said the bank looked at more advanced treasury workstation products, but found them more expensive and more difficult to use than the ADP product.
At Continental of Philadelphia, with $4.5 billion in assets, officials said the software allowed them for the first time to offer services comparable to some of their bigger competitors in the region. The bank tested the system with 10 relatively small corporate clients that had annual revenues between $30 million and $50 million.