Now that its Los Angeles corporate banking customers have been moved to a new, Web-based system, all of Sumitomo Mitsui Banking Corp.'s North American clients, and most of its European ones, are using the system, the bank's chief information officer says.
It has been a slow process for the Tokyo-based Sumitomo Mitsui, the world's third-largest banking company. A corporate predecessor, Sumitomo Bank (which merged with Sakura Bank Ltd. last year), announced in 1998 that it would convert customers to the Global Integrated System. The conversion process began a year later in New York.
Before developing the new system, the bank had operated on proprietary, mainframe-based core processing software that was at least 25 years old and perhaps 30, Peter McCormick, the company's chief information officer for Europe and North America, said in a recent interview.
After New York, Sumitomo converted its London office in 2000 and its Brussels office last year. The Los Angeles conversion was finished last month. On the schedule for next year are Dusseldorf and possibly Paris, he said.
"We're going to finish the West first," Mr. McCormick said. "When we're done with that, then we'll see where the bank wants to go in Asia. You've got to be Web-enabled to be competitive."
Sumitomo's primary business is helping Japanese-based companies with both domestic and overseas transactions. It also serves international companies that do business in Japan, and "others deal with us on a pure banking basis," he said. "We become a bank of choice. Nobody has one bank today."
The new system gives corporate treasurers a real-time view of their accounts and allows corporate customers to engage in multiple transactions simultaneously from various locations, in different languages and currencies, so that an executive can see instantly when a payment has been credited to the proper account or when a corporate line of credit has been drawn down.
"All sessions interact in real time," Mr. McCormick said.
The bank has built a series of interfaces to connect the core banking system to the specialized computer systems for automated clearing house, in-clearings, transactions through the Society for Worldwide Interbank Financial Telecommunication, and the like.
"We think it's a pretty neat, full-functioned application," Mr. McCormick said.
With the shift from the legacy mainframe system to a vendor-supplied, Internet-enabled application - Sumitomo uses core processing software from Sanchez Computer Associates Inc. - "you can sustain higher rates of change in the bank, which is good for the bank and good for the customers," he said.
Frank Sanchez, the chief executive of the Malvern, Pa., banking software company Sanchez Computer Associates Inc., said: "There has to be one version of the truth," "What you see on the Web is the same information the bank sees. We consider that to be a very important consideration."
Octavio Marenzi, the managing director at the Boston consulting firm Celent Communications LLC, said the challenges of converting core processing systems are daunting, and the risk of failure is high. "It's very rare, very expensive, and very risky, so it's very unusual."
