Headlines:
Scotiabank, Fed In ACH Partnership Sanderson of Tex. to Use More Imaging A Biometric System for a Texas Company
Scotiabank, Fed In ACH Partnership
Bank of Nova Scotia has begun providing gateway services for the Federal Reserve Board's automated clearing house transactions with financial institutions in Canada.
Beth Bailey, the Toronto banking company's vice president of global transaction banking payment products and remittance services, said it won a competitive bid that the U.S. central bank had put out last fall for the FedACH International Canada Service.
"We think there's a huge opportunity," Ms. Bailey said Monday.
Toronto-Dominion Bank previously operated the Canadian gateway. A spokesman there did not respond to a request for comment.
Before the Fed introduced the international ACH service in 2001, U.S. bank payments to Canada were limited mostly to paper-based checks or wire transfers.
The Canada service was the Fed's first international ACH operation.
Since then it has opened ACH gateways to Mexico and five European countries.
Last week the Fed said Scotiabank would offer more competitive pricing for the service's foreign exchange rate.
The Fed said there would be no change to the 3.9-cent cross-border surcharge that U.S. institutions pay to originate payments.
Ms. Bailey said Scotiabank's foreign exchange staff worked directly with the Fed on pricing. She said she did not have access to other bidders' proposals, but she said, "I guess we were a little better."
The Fed said it delivers funds on the same day as U.S. settlement for items paid in Canadian dollars.
Those paid in U.S. dollars are delivered the same day or the day after, depending on the time they are delivered to the Fed.
Sanderson of Tex. to Use More Imaging
Sanderson State Bank in western Texas, which is using imaging software to send check images to the Federal Reserve Bank of Dallas, plans to use the same technology to make images other kinds of documents, such as signature cards and loan paperwork.
The $22 million-asset Sanderson is also about to launch a remote deposit service for its business customers.
The bank is getting funds to its customers quicker as a result of the check images, Billye J. Scott, its senior vice president, said Monday.
In August, Sanderson, which processes its checks in-house, began using imaging software from the Dallas vendor Community Banking Systems Ltd. to transmit check images to the Fed rather than the paper items, she said.
The vendor announced the licensing agreement March 6.
After Sanderson began using the software, "we were immediately - that week - approved by the Fed," Ms. Scott said.
The software replaced a system from another vendor, which she would not identify, that the bank used rather than microfiche for in-house file storage.
The older system could not format check files for transmission over the FedForward network, she said.
Before it installed Community Banking Systems' software, Sanderson used United Parcel Service to carry its nightly cash letters to the Dallas Fed, and that setup could cause delays, especially over weekends, if the courier had other stops to make in the sparsely populated area, Ms. Scott said.
"Our cash letter would not even leave our area until the next business day, which could be Monday or even Tuesday over a holiday."
Sanderson is scanning customers' signature cards, so tellers can verify checks on the spot, and by early summer it plans to begin imaging loan documents, she said.
The bank has tested a remote deposit service with its first business customer and plans to go live with it in a matter of weeks, Ms. Scott said.
"We have some customers who are not in Sanderson who we think can get their checks to us faster."
A Biometric System for a Texas Company
International Bancshares Corp. of Laredo, Tex., says it is installing a biometric fingerprint authentication system on its internal network.
Chris Loehr, the senior vice president and network manager for the $10.4 billion-asset banking company, said last week that the deployment began at the end of 2004 "to beef up our authentication." The project is halfway complete but will be finished in the next few months, he said.
International is using software from Saflink Corp. of Bellevue, Wash.
The installation has gone smoothly, Mr. Loehr said. "We really hadn't encountered any of that cultural backlash, or that invasion-of-privacy deal."
Some companies that have put biometrics in place say they were concerned about people associating using their fingerprints with being arrested, for example.
Colin McLaughlin, Saflink's manager of sales, said the only problem IBC encountered was that some employees had faint fingerprints that required more sensitive scanners. These scanners turned out to be less expensive, so these employees actually saved International money, he said.
Over 100 banking companies are testing or deploying Saflink's software, he said.
