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Irene Dorner, president and chief executive of HSBC's U.S. bank, is looking beyond the sales of her credit cards business and 195 upstate New York branches and planning to expand HSBC's operations in California and the West Coast.
September 29
The global treasury management market, in which banks help corporate clients with cash management, trade finance and global payments, is huge and lacks good self-service tools and automated processing. U.S. Bank estimates the international corporate payments market totals about $67 trillion in yearly payables.
More than half of the those payments still come via paper check, according to Forrester Research. This leaves a wide open opportunity among large financial competitors such as Visa and U.S. Bank's Syncada payments network, JPMorgan Chase, Bank of America, and others to provide advanced treasury technology to corporate CFOs and treasury departments.
HSBC, which is cutting back in other areas of the institution,
The new offering caters to HSBC corporate customers that use SAP's enterprise resource planning software. The solution connects to a couple of SAP products: SAP Bank Communication Management, a payments tracking application; and SAP NetWeaver platform, SAP's overall application environment.
It also includes a pre-configured SWIFT component that's designed to improve access to the SWIFT network. NetWeaver is services oriented and uses C++ and Java EE programming languages, as well as open standards that allow it to interoperate with Microsoft, .NET, and IBM Websphere, which are used by many companies.
The integration here is meant to ease the flow of digital payments between HSBC's corporate clients and those clients' other bank partners in the payments supply chain. "At the moment we are concentrating on getting the basics right, starting with payments processing," says Marcus Treacher, head of e-commerce for global transaction banking at HSBC.
"Once we have proved that this connectivity works, we will extend the HSBC Connect to SAP offering to include trade finance, the remaining treasury services and regulatory reporting."
Treacher says HSBC currently offers payment collection, foreign exchange and other corporate financial transactions through a single pipe via HSBCnet.com or through a single connection via HSBC Connect. By reengineering HSBC Connect to embed it within SAP, the bank hopes to make it easier for corporates to access digital financial services, helping HSBC expand those relationships.
"This offering provides the corporate treasurer with efficiency gains by automating manual processes," Treacher says. "It also provides better and more timely visibility over cash positions."
And by basing the solution on open standards, HSBC hopes to lower the cost of ownership for corporate clients, which would presumably have less technology infrastructure to manage because of the reduced integration with the payment systems of other banks and business partners. Corporate clients could also reduce the manual keying of transaction and registration data for their own clients.
"The onboarding is much speedier. A corporate can go into play with a single bat," Treacher says. Many of HSBC's competitors have taken similar steps. Syncada, for example, has pushed for standardized invoice processing; American Express' platform allows corporate clients to maintain existing workflow processes; and Citigroup's cross-border payment service uses a single invoice for vendor invoices and other transactions. Citigroup is also a participant in the Syncada network, along with Elavon and Commerce Bank of Missouri.
