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Topeka FHLB Using Zions Unit's Software
The Mb>Federal Home Loan Bank of Topeka, facing potential exposure to Sarbanes-Oxley Act compliance, is using a Zions Bancorp. subsidiary's software to upgrade its risk management.
After reviewing a half-dozen vendor offerings over a year, the Home Loan bank licensed RiskResolve operational risk management software in March from Providus Software Solutions Inc. of Nashua, N.H.
The Home Loan bank is configuring the software and customizing some of its reports to match what it supplies to its audit committee. The first group of seven users received training at the end of August, and a full rollout is planned for this year.
The government-sponsored enterprise was struggling to maintain its 4-year-old enterprise risk management program, which relies on a system of spreadsheets and text documents to monitor 127 key processes.
As the monitoring has grown more sophisticated and the records more voluminous, it has become "very cumbersome and time-consuming to extract the data," said Martin L. Schlossman, the Home Loan bank's assistant vice president in charge of planning and consulting. "We were pushing the boundaries of what we could capture and use on an efficient basis."
The Sarbanes-Oxley issue "tipped the scales for us in terms of looking at a risk management software solution," Mr. Schlossman said in an interview Aug. 18.
The 12 Home Loan banks, which are privately owned but backed by the government, have been under pressure to register with the Securities and Exchange Commission, in part because of an accounting scandal at Freddie Mac, another GSE that supports mortgage lenders.
The $42.1 billion-asset Topeka bank is preparing to register voluntarily with the SEC, possibly next year, and to do so "we have to be Sarbanes-Oxley compliant," Mr. Schlossman said. "We're operating under that assumption right now."
One reason the Home Loan bank chose RiskResolve was its ability to customize the view to allow each user to focus on the management of individual processes. By contrast, Mr. Schlossman said, one competing product was "like a large menu in a restaurant" that presented users with lots of irrelevant information.
Eventually, two people in each of the bank's 24 business units - about a third of the bank's 145 employees - will use the software, he said. "It's not going to answer all our questions, but it will help us manage the wealth of information that we have."
Mellon Offering ARC Conversion to Banks
Mellon Financial Corp. is pressing ahead on plans to provide outsourced cash management services to other banks.
The Pittsburgh banking company said Aug. 19 that it has started offering accounts receivable conversion at its six retail lockbox locations.
Mellon said that ARC - the conversion of consumer check payments to automated clearing house transactions at the lockbox - account for about a quarter of the payment volume handled by Mellon Global Cash Management. The parent company also said its ARC volume accounted for nearly 10% of the national total in the second quarter. Nacha, the electronic payments association, reported the national total at nearly 210 million transactions.
Mellon has said it is stepping up its "white-label" cash management services, such as lockbox, as a way to capitalize on its investment in digital image technology at a time when other banks may be looking to cut back.
Nacha requires billers to offer consumers a way to opt out of ARC, but Mellon said its clients are finding that less than 1% of ARC participants' customers opt out.
"Such acceptance is a clear indication that, nationally, consumers are becoming increasingly secure with the various methods of electronic payments," said Robert W. Stasik, a Mellon executive vice president.
