The U.S. unit of a Japanese trust company is working with a start-up software company to upgrade a global trust accounting system that runs on a network of personal computers.
Dai-Ichi Kangyo Trust Company of New York, a unit of Dai-Ichi Kangyo Bank of Tokyo, already has signed a $1 million global licensing agreement for the existing software with the start-up software vendor, Cambridge Technology, based in East Brunswick, N.J.
Now the companies are working to transform the software by the end of the year from its current version, which runs on personal computers, to a new technology called client/server computing, where networks of desktop computers are linked together to work more efficiently.
If the companies are successful, it could be the first multicurrency trust accounting system to run in a client/server environment.
Today, most trust accounting systems run on mainframes. Dai-Ichi estimates it will save about 25%, or $3.5 million, by moving to the PC system rather than upgrading its mainframe-based system, said Donald Roundy, executive vice president, Dai-Ichi Kangyo in New York.
The New York office has some $5 billion to $10 billion of assets under custody.
By moving to a client-server environment, the system will be more flexible and be able to handle greater volumes than it can in its current version, where it lacks a "relational" data base that can more easily manipulate information.
The data base vendor, Microsoft Corp., currently is ironing out some bugs in the relational data base, but Cambridge Technology and Dai-Ichi expect to be able to incorporate the data base by the end of this year.
The bank is also installing the software in its Luxembourgh office, where it expects to be in production on October 1.
Multiple Locations Sets
The New York office is incorporating foreign-exchange capabilities into the software to meet that office's needs, Mr. Roundy said.
Dai-Ichi is helping add other functions to the software, such as a connection to the Depository Trust Company.
He hopes that Dai-Ichi eventually will use the software in multiple locations so that the bank will have common systems worldwide.
Back Office Tracking
The decision to go with this software was made in New York, not by the parent company in Tokyo, but "We're hoping the tail will wag the dog," Mr. Roundy said.
The bank still runs a securities movement and control system - which handles back office tracking and clearing of securities - on a mainframe, but hopes to move to the Cambridge Technology version, which runs on PCs, by mid-year 1994.
Eventually the trust company hopes to move all its software off the mainframe and onto PC networks.
Dai-Ichi Kangyo's operations center, called DKB Data Services, which handles data processing for all North American units of the bank, is doing the development.
|Masters of Our Own Fate'
In its licensing agreement with Cambridge Technology, the bank has agreed to purchase source code, but not to pay for maintenance. "We'll be masters of our own fate, "Mr. Roundy said.
The new software will give the bank's customers greater flexibility in looking at their cash flows and projections.
The two principals of Cambridge Technology, Fred Erdberg and Meyer Grumet, left Vista Concepts over two years ago to start the new company.