Interactive Planning Systems Inc., a leading provider of PC-based management and accounting systems, is testing a new profitability measurement system at an undisclosed bank site.
The system, called Summit Funds Transfer Pricing, aims to help banks assess more accurately the performance of matched maturity funds valuations and related allocations.
"Based on our involvement with profitability measurement in over 400 financial institutions, we've built a system that handles a wide variety of methods of charging and crediting for funds used and provided," said Jerry Weiner, president and CEO the Norcross, Ga.-based software company.
The new system supports individual instrument matched maturity funding based on user-defined yield curves, he said.
One piece of the new IPS system is designed to make sense of imbalances that arise in the matching process when specific branches do not participate in both sides of a matched transaction.
"I've got to have some mechanism in place to give (branches) credit for deposits," Mr. Weiner said. "In doing so, I create a measurable amount of net interest for the branch."
The software also allows banks to collect information directly from any loan, investment, or deposit system for funds transfer pricing without extensive programming. The simplicity of the programming allows organizations to install the system in less than two weeks on average.
After data extraction and credit calculations are done by the software, reports can be sent to workstations, printers, or disk files.
The development of the new IPS system is representative of software developers' efforts to take advantage of the rising power in desktop computers. "This is a direct benefit of less expensive PC computer power today," Mr. Weiner said.
The new system costs $48,500 for a single site license. IPS has systems installations at over 4,000 financial institutions worldwide, including 50 of the top 100 U.S. banks. IPS plans to make the system commercially available in the second quarter.
Other vendors offering funds transfer pricing systems include Bancware Inc. and Sendero Corp.