More than a decade into the Internet banking age, there are still a handful of bumpy roads that haven't been paved by Web innovation, and Union Bank is working to smooth out a pair of them: invoices for business clients and mutual fund trading for institutional accounts.
On the payments side, the $49.4 billion bank is deploying webBANKER, a FundTech product that hopes to tap the time-saving benefits of EPN STP 820-a low-touch electronic payments standard developed by the Electronic Payments Network and supported by BITS, NACHA and the Association for Financial Professionals. "Instead of having to enter each item on the seller side, the seller only has to work with payment items that get rejected," says Valjean Sanchez, a svp at UBOC.
UBOC is offering this feature to its entire business customer base, and has already deployed it with a pair of firms, the Mark Company and Makita Corporation of America.
The product aggregates all payment and remittance data to create a complete EDI transaction and then bundles this information to create a NACHA file. This file is automatically routed through UBOC's infrastructure to the receiving bank, which posts the payment. The receiving bank then forwards the EPN STP 820 remittance information to the receiving company, which can post the payment automatically to their accounts receivable application or may request that its financial institution interpret the file and provide a remittance report. And by offering the new EPN STP 820 standard, the bank can bring a level of payments efficiency that's normally only available to large corporations because of the expense of purchasing EDI systems under the existing standards.
Ravich hopes FundTech can tap into a trend among banks to get more involved in the improving the nuts and bolts of payments transactions. As he sees it, there's not much margin to squeeze out of ACH and wire transfers at this point, and the best change to reap financial benefits is by making these processes more efficient. "The more involved banks can get in the flow of these transactions, the more value they can deliver for the transactions, and the more they can charge," he says.
Sanchez says the new technology and protocol allows small businesses to more fully embrace electronic payments without being experts in EDI. "For a small business, they get a form on the Web, and they don't have to worry about an EDI file," Sanchez says, adding these firms only need an invoice, date, invoice number, payment amount, remittance and discount.
Beyond small business payments, UBOC also saw a need for Web upgrades in its mutual fund operation, and now offers Web-based trading for its institutional clients. The bank, which serves clients globally and administers more than $209 billion in trust and custody assets, is offering users either individual or group account views. These users can then obtain gain/loss information for realized and unrealized gains on account activity, view transaction data for analysis, access statements on demand and create customized reports.
Sandra Scherman, the product manager who was involved in the in-house development of the site in conjunction with Perficient, says that in the environment without automation, clients had to fax in requests for mutual fund trades. Manager would then pick up those requests and key in trade information, which was then transmitted to the operations group.
