Citibank, Bank of America, and Banco Venezolano de Credito of Caracas are expected to be the first banks to participate in Alterna Technologies Group Inc.s corporate cash management system.
The new abix system for Alternas banking information exchange is meant to help banks connect to multinational corporations that use the Calgary, Alberta, companys corporate liquidity management software.
The biggest obstacle has been bank connectivity, said Cathy McGrail, Alternas vice president for Latin America. Until now corporations werent getting the efficiencies and the multibank capabilities that they needed.
Ann Cairns, the head of Citibanks e-business solutions unit, said the Citigroup Inc. subsidiary became interested in the Alterna approach a couple of years ago.
As soon as they started to get traction with some of the big companies around the world, we started to talk with them, she said. Because we have large multinational customers, it was a natural for us.
Citibank says it has identified 10 corporate customers that are using Alterna for cash management. The bank has named two of them publicly the International Air Transport Association and the pharmaceutical giant Merck & Co.
In the case of the IATA which offers payment settlement to more than 400 airlines worldwide the Alterna system enables the associations members to sort out net payments more efficiently, Ms. Cairns said.
They owe each other money in different currencies, she said. With the banks capabilities in global finance, Citibank can do the foreign exchange on the back end of that, she said.
Citibank plans to introduce balance and transaction reporting services this month for the 89 countries where it does business, Ms. Cairns said. It will offer low-value, automated clearing house-type payment services in 40 nations by the end of the second quarter and high-value payments in all 89 by October, she said.
As the world moves more to real-time currency management, the ability to act quickly and to move money where you need it to be becomes increasingly important, Ms. Cairns said.
Alterna has offered corporate liquidity management since 1997 through a system called auros that is built on Internet protocols. Ms. McGrail said abix will allow auros users to take advantage of full suite of business processes, including balance and transaction reporting, account reconciliation and management, cash flow forecasting, intercompany netting, multibank settlement, pooling, and payment routing.
Initially, Alterna planned to establish an Internet-based system for multinational corporations to consolidate the accounts from scattered enterprise resource planning systems, she said.
Because of the complexity that has resulted from global mergers and acquisitions, theres no way youre going to get all the corporates to standardize their ERP, Ms. McGrail said. With all the M&A, all the multinationals are finding its impossible to have a single platform.
Michael Killen, the president of the technology research firm Killen & Associates of Palo Alto, Calif., said the challenge for Alterna will be to establish abix as a standard for online treasury services. I think this is a challenge to SunGard.
SunGard Corp. unveiled its eTreasury eXchange initiative in November 2000 to link users of its SunGard Treasury Systems software to their banks for cash management and banking services.
In April, Deutsche Bank signed on to provide foreign exchange and liquidity services.
With Citibank and Bank of America supporting abix, Mr. Killen said, this is a wonderful start.
