Norwest Corp. and State Street Corp. are the latest in a line of major commercial banks to license Politzer & Haney's software for offering cash management services with Internet browser technology.
The banks will use Web Payments, a system designed for originations of automated clearing house transactions. The decisions were announced this week at the National Automated Clearing House Association's Payments '98 conference.
Chase Manhattan Corp., First Maryland Bancorp, and Vermont Financial Services Corp. had previously said they would use the Politzer & Haney system, which gets them away from the cumbersome practice of maintaining software and installing upgrades.
Citicorp and NationsBank Corp. also announced plans to develop similar browser-based cash management services in recent months.
Scott Peterson, senior vice president of Norwest treasury management, said access to sophisticated cash management software had been limited to the bank's largest corporate customers. Browser products can be sold to a vastly wider market without "additional investments or expenditures."
"If we were to have just a 10% penetration in our corporate environment ... we would increase the number of customers using this type of technology by tenfold," he said.
The Politzer & Haney software licensed by Minneapolis-based Norwest, which has roughly 100,000 commercial accounts, will let companies dial in to the bank's value-added network, or intranet, for access to a server linked to its ACH processing system.
The only software required on the corporate treasurer's personal computer would be the same type of browser used for Internet surfing, either Microsoft Corp.'s Internet Explorer or Netscape Communications Corp.'s Navigator.
These interfaces are seen as far more flexible than conventional DOS or Microsoft Windows-type programs. And by keeping its ACH data bases at the bank, Norwest expects to reduce customer support costs.
Norwest plans to integrate other treasury management, foreign exchange, trade finance, and trust services into the browser service, to be called Norwest CustomerConnect.
Christopher Haney, president of Newton, Mass.-based Politzer & Haney, said electronic cash management services have been in place for more than 20 years. Corporate treasurers use their desktop systems to initiate and track electronic funds transfers and get balances and other information.
Even as banks have attempted to move corporate customers from DOS to Windows systems, Mr. Haney said, there are still many first and second generations of DOS in use.
He said a growing challenge for wholesale banks is the need to support multiple versions of software.
The problem is compounded whenever computer-format or regulatory changes occur. Then a bank would have to upgrade software and mail out dozens of computer diskettes to each customer, or in certain cases actually do the software installation. In a browser environment, software changes could be made at the bank's back end and uploaded to customers, Mr. Haney said.
"This produces a tremendous difference in the cost and supportability of these products," he added.
Jo Ann E. Miller, vice president of State Street in Boston, said bankers are probably "sorry" to have devoted so much effort in recent years toward Windows-based treasury workstations.
She said her bank anticipates significant cost savings by selling an ACH origination service to commercial customers, who will use it to get access to State Street's private network.
Mr. Peterson said Norwest will continue to support all its wholesale products, but "our customers are far more open to understanding the need for sunset dates on obsolescent technology."
"We can't continue supporting three or four generations of technology," he said.
The lower cost of the browser technology makes it easier for banks the size of $2.1 billion-asset Vermont Financial, parent of Vermont National Bank, to play in the cash management and payments market.
"We're convinced that this is the proper direction for us to move," said John Revilla, vice president of corporate and correspondent services at Vermont Financial. He said Politzer & Haney is "leading the way in this arena" with the Web Cash Manager product it bought.
"As cash management continues to evolve and there is the need to develop and deliver more features and functionality, the ability to incorporate them easily, without having to deal with software distribution, is a substantial advantage," the banker said.