BankAmerica Corp. has signed contracts with Intranet Inc. and Digital Equipment Corp. to install a new funds transfer system.
The San Francisco-based banking giant will be implementing Intranet's Money Transfer System, or MTS, a payment processing and communications system that operates on Digital Equipment Corp.'s VAX computers. The system can interface with Chips, Fed Wire, Fed Book Entry Securities, Swift, and telex carriers on a multibank database.
Colin J. Klipin, executive vice president with BankAmerica, said the new system will consolidate the bank's assortment of inhouse payment operations systems from New York to California.
Mr. Klipin said BankAmerica, as one of the world's largest money transfer banks, wanted a standard environment for its many cash management services. He said the system will "improve our cost structures in terms of delivering these services."
Though terms of the deal were not disclosed, Mr. Klipin said the multiyear, several-stage implementation of the system was "of enormous value" to the $203 billion-asset institution.
"With the increasing volumes that we see as a part of the payments system, we decided to consolidate a number of systems we had here in the U.S., not only for the largest subsidiary of Bank of America, but also for our affiliates," Mr. Klipin said.
The system, which can integrate with many bank applications including foreign exchange and letters of credit, can also integrate with proprietary and third-party cash management systems.
"We reviewed the available alternatives and, for a bank of our size, there are not many in the market," Mr. Klipin said.
The first phase of the conversion, the Swift and telex interfaces, has quietly been under way for approximately one year.
"It is a recognition of where the technology is today versus where it was 10 years ago and we are very pleased with the results," Mr. Klipin said. "This is going to enhance our position of leadership in the payments business."
More than 50 banks use Intranet's system, including Chase Manhattan Corp.
Intranet, based in Newton, Mass., developed the Money Transfer System with the Bank of Boston Corp. in 1983.
Officials with Intranet said the entire conversion for the Bank of America project may take up to three or four stages, depending on yet-to-be completed specifications.
Tony Smith, president and chief executive of Intranet, said the software company will be replacing the bank's various inhouse systems. He said the move positioned the bank for future growth and restructuring.
"It's a complete reengineering of their payment processing message flow," Mr. Smith said. "It's replacing on the order of a dozen existing systems with a single integrated system."
Breffni McGuire, marketing manager with Intranet, said Marlboro, Mass.-based Digital Equipment will install the hardware and the systems software, while Intranet will be on-site with the bank during the actual conversion to the new system.
There will be a total of over 100 terminals installed at offices in New York, California, and a number of affiliate banks across the country, Ms. McGuire said.