Boatmen's Making a Push Into Electronic Invoicing
Hoping to attract and retain corporate clients in a business dominated by money-center banks, Boatmen's National Bank of St. Louis is upgrading its corporate electronic payment services.
Boatmen's is the latest among a handful of financial institutions that are investing in software designed to handle the swapping of payments and related trading data between corporations. This relatively new product is known as electronic data interchange, or EDI.
Although this unit of Boatmen's Bancshares Inc. has only a few corporate clients using its EDI offering, they are large companies that have a number of relationships with the bank.
"The service is available from other banks, and we want the companies to maintain their relationships with us," said Ray Podraza, vice president and EDI product manager at Boatmen's. "As the industry continues to evolve and adopt EDI, we need to be a participant."
Boatmen's, with $15 billion in assets, will be the only bank to offer EDI in the St. Louis area. But several other banks in the Midwest already have the service, including Continental Bank and Harris Bankcorp's Harris Trust & Savings Bank, both based in Chicago. Other banks - including units of Chemical Banking Corp., Chase Manhattan Corp., and a few West Coast institutions - also offer EDI.
Using computers to exchange payments, invoices, and purchase orders is speedier and more efficient than paper-based methods. But many companies have been slow to make the change because of the technology investments required.
EDI is viewed as essential for a comprehensive offering of cash-management services that include wire transfer, automated clearinghouse payments, and lockbox processing.
Boatmen's is installing software from General Electric Information Service Co. that will enable it to streamline the way it handles standard company-to-company payments and remittance data. The software, called BPS Central, allows the bank to receive and originate payments and accompanying data in standard computer formats.
Customers will transmit payment information to Boatmen's in a single standard format, which Boatmen's will translate into the format required for processing by the receiving financial institution. Boatmen's will also translate payment formats that it receives from the customer's trading partners.
1992 Availability Planned
Currently, Boatmen's handles only incoming automated clearinghouse transactions.
Mr. Podraza at Boatmen's declined to say how much the bank is investing in the software. Sources say the system, which runs on IBM mainframes, costs $50,000.
The bank is installing the software on a mainframe computer now, and plans to begin testing it by yearend. The EDI service is scheduled to be available to customers by early 1992.