Meeting needs: Corporate customers are increasingly calling for innovative online banking tools

Inspired by consumer technology, corporate clients are starting to demand web 2.0 features and tools from their transaction banking platforms, forcing banks to upgrade their systems to keep pace. Writer John Beck

The average corporate treasurer is unlikely to spend every waking hour chatting to friends on Facebook or broadcasting each and every passing thought over Twitter. Nevertheless, even the most wilfully technophobic treasury head will probably have taken advantage of some of the interactive online applications commonly arranged under the blanket term 'web 2.0'.

The now ubiquitous nature of social media and web 2.0 technology in the consumer world means that treasurers are starting to expect at least some of the basic tools they take advantage of in everyday life to be part of the experience they have when interacting with a bank. As is customary in business banking, however, technology has lagged far behind the consumer sector and in many cases banks have failed to provide even basic web 2.0-like features into their treasury platforms.

Things are starting to change, however. Some banks are meeting, and anticipating, these new demands, offering their customers YouTube-style videos, customisable widgets and home pages and even fully fledged social networks and forums.

A stronger focus

Transaction banking will be a bigger concern than ever for most financial institutions in the future, says Nancy Atkinson, senior analyst with the consultancy Aite Group. The stable returns provided by such operations contrast starkly with still-jittery capital markets, and banks will look to update their systems in the hope of attracting new, and preserving existing, clients.

"Banks are looking at their treasury systems and being a little more critical," says Ms Atkinson. "We're definitely seeing a stronger focus now."

However, she adds that most banks are approaching new technology rather gingerly, and are only just beginning to implement the kind of rudimentary tools and functions that have been available for many years in the consumer space - automatic browser refreshing and customisable home screens, for example.

"Web 2.0 technology is currently being embraced by banks and vendors to provide solutions that allow people to customise what they see on their screens and have the relevant data come up for them instead of having to search through a more standardised screen," says Ms Atkinson. "And that is where I'm seeing things happen right now."

BOA's interactive drive

One firm taking up more interactive technology in its online banking is Bank of America (BoA). When the North Carolina-based banking giant began the task of replacing the multiple, fractured online corporate and business payment systems that resulted from years of organic growth and acquisitions, it opted for a platform provided by software vendor FundTech.

"Web development in the early 2000s was really just providing a user interface [UI], with most of the focus on the back end and on just presenting data," says Cindy Murray, executive director of e-commerce at BoA. "Web 2.0 technology is making that UI much more interactive."

BoA is now able to take information from multiple sources - on net cash positions, bank account balances and credit facilities, for example - and present it to customers in a dashboard or a widget, says Ms Murray.

One of the key capabilities of BoA's new platform is akin to order forms of the kind routinely deployed by online merchants, which flag up card or address information entered in the wrong format, she says.

Each type of payment entered into BoA's system has certain restrictions on the way information is formatted, so, as payment details are entered, the platform's straight-through-processing rules will check and validate this with the payment services hub and flag up anything that is entered incorrectly. As a result, users will be able to tell immediately if information is incorrect and what they did wrong. Under the previous system, errors would not be detected until the end of the process and in many cases users would then have to search through the payments form field by field, Ms Murray adds.

Helpful and efficient

The new BoA platform also finds more efficient ways for the bank's clients to do business. When a batch of payments is submitted, BoA can identify whether there is a better way to route the payments. If there is, it is suggested in real time.

"We are able to use web 2.0 technology to educate and provide contextual help," says Ms Murray. "It is one thing to order a pair of shoes online, but if you are sending a $5m payment to a country you have never done business with before, it is quite nerve-racking. With contextual help, you know right away if you are entering information incorrectly and get instructions on what to do. That is going to be a significantly different experience compared with what banks have been able to offer in the past."

Although clients were asking for ways to track and manage payment workflow, not all of these new features were prompted by customer demands, according to Ms Murray. "In terms of the gadgets and dashboards, we took the initiative," she says. "While clients are not asking for this, we will wow them with it so that it creates stickiness."

The presence, or lack, of these functions may not at present prove to be a deal-breaker for treasury customers, many of whom will be used to existing methods of doing business. But the next generation of corporate treasurers - who will have grown up immersed in the online world - may expect rather more, says Colin Kerr, industry manager for payments and core banking with Microsoft Financial Services.

"Treasurers do not necessarily like change very much," says Mr Kerr. "They are used to their spreadsheets and traditional applications. But the treasurers of tomorrow are the socially connected generation of today. So we have to think about gearing up for that."

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Nancy Atkinson, senior analyst with the consultancy Aite Group

Citi BE meets demands

When Citi Global Transaction Services began to develop its soon-to-be-launched online corporate banking platform, Citi BE, customer demands were fresh in the company's mind. "The real challenge our clients put on the table was to say that you [Citi] are sitting on a lot of content, data and workflow expertise and, if we could harness that and deliver it to the desktop, then it would help us improve the control and visibility of our cash," says Gary Greenwald, chief innovation officer with Citi Global Transaction Services.

Key to Citi BE's functionality was the ability to take multiple sources of data - some of which might be sitting idly in a bank's transaction database or a corporation's systems - pull it together and place it underneath a more sophisticated set of online analytical tools. Citi BE also includes electronic bank account management and incorporates lessons learned from the consumer world as well as from other industries on improving workflow and process efficiency, says Mr Greenwald.

One of the platform's web 2.0 highlights is a series of short YouTube-style videos of Citi GTS experts.

"We wanted to get started with something straightforward, getting the expertise of our people round the world who are knowledgeable about a particular region, functional area, discipline or regulation and extending the way that intellectual content is displayed to our clients," he says.

Mr Greenwald adds that Citi GTS traded the traditional high production values of corporate video production such as music and lighting and narration for ubiquity.

"Making use of cheap video cameras, we can put one- to two-minute blurbs out in close to real time and put them in a very easy-to-find, searchable, shareable interface," he says. "People are very used to YouTube or Facebook videos; this is similar, except that it is corporate content."

Mr Greenwald describes video content as the "low-hanging fruit" of business-to-business (B2B) social networking and collaboration, but says careful consideration is needed when deciding how best to proceed with two-way interaction. While there is no shortage of applications for blogging, chat or networking, he cautions that other factors must also be taken into account.

"One of the things that is causing us to go more slowly than on the consumer side is the view of many of our clients, and banks, that once you are in a B2B context you have to start dealing with issues such as who someone is representing when they say something," he says.

"We know it is not a matter of 'if', but of 'when', and over the next few years we are going to start to address those issues. I am trying to temper some of the natural enthusiasm with doing this in a disciplined way, because the last thing I want to do is put our clients or ourselves in a position where we have not thought through all these issues," he adds, revealing that Citi GTS has just hired from an outside industry to drive corporate web 2.0 development.

The Benche makes its mark

Swedish bank Skandinaviska Enskilda Banken (SEB) obviously felt that it had overcome the issues relating to web 2.0 services. It launched a social networking platform named The Benche back in November 2008. Originally aimed at trade finance users, it was recently expanded to target cash management professionals and treasurers operating in corporate, small and medium-sized enterprises. The Benche now has more than 4200 registered members spread across more than 150 countries.

Håkan Aldrin, managing director for The Benche at SEB, acknowledges that there is some way to go before fears about the dangers of social media in the business banking sphere are alleviated. Even in SEB, concerns were voiced that discussion might reflect negatively on the bank. "In the corridors of the bank before we started The Benche there were concerns of what would happen if there were a lot of negative comments about SEB. Banks have not always been the most popular of businesses during the past few years," he says.

These fears turned out to be unfounded, however. Mr Aldrin credits this to the comparatively light touch with which SEB runs The Benche. Membership is not restricted to SEB clients, and even includes rival banks. It is this diverse membership that Mr Aldrin feels allows SEB to cater for clients that operate in countries where SEB's presence is, as Mr Aldrin admits, "zilch".

"For this platform to be really effective, we need not only to have SEB clients but others there also," he says. "Because our clients have a larger geographical scope than we as a bank have, we need other intake from the financial community around the globe."

Similarly, very few discussions are off limits on The Benche, even debate about SEB's own services and systems, something that Mr Aldrin has no qualms about. In fact, he expects that, just as many people would not think about buying a television without going online and doing some research, treasurers will soon discuss the relative merits of banking platforms in a virtual forum before signing up with one. "The same mindset has to be transferred into the business world," he says.

Getting mobile

Another major trend in consumer banking that is only just starting to surface as part of treasury services is extending services to mobile devices. Citi GTS's Mr Greenwald sees trends in business banking as moving in a somewhat different direction from the consumer space, however.

"My view is that a business treasury department that has put multimillion-dollar investment into a treasury system is probably not going to let its people run around doing everything on mobile devices without thinking about the control or workflow issues," he says.

Nevertheless, mobile technology is being deployed in a few select instances between bank and treasuries. Alerts and approval of payments via mobile device are now offered by a number of banks, including Wells Fargo. Mr Greenwald also anticipates the use of targeted information alerts, a service that Citi is currently trialling, along with payment authorisation.

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Håkan Aldrin, managing director for The Benche at SEB

A need for speed

It is the large corporations themselves that are pushing most for the latest features on their treasury platforms, according to BoA's Ms Murray. For some, however, new features are not being added fast enough.

Software giant Microsoft uses many treasury-type applications as well as platforms from numerous different banks around the world. But it is also building internal risk management and portal capabilities that use web 2.0-style technology to pull information together from different internal and external sources.

"One of the challenges for the company that we looked at during the financial crisis was risk management and 'disaster recovery capabilities' in the event that we had problems with the viability of a banking partner," says Microsoft's Mr Kerr.

"Being able to service multiple banking partners very flexibly is very important to us, as is understanding the 360-degree view of risk, whether it is with banks or trading partners. Beyond the standard applications that we could buy from any number of providers, we are able to invest in providing that extra level of risk management that you cannot necessarily buy off the shelf," he adds.

Mr Kerr mentions calculating a picture of current receivables exposure as an example of such an extra feature. Microsoft takes internal credit information about its trading partners as well as data on receivables outstanding and maps additional external data from ratings agencies on top. The result is that if a company is behind on its receivables, it can be profiled in light of how the wider industry rates the organisation.

Of course, not every business has the resources or expertise to fill in gaps in existing banking platforms, but to secure their biggest clients, banks will soon be forced to meet these web 2.0-inspired needs, says BoA's Ms Murray. "I think it is absolutely a move that everyone will have to make," she says. "When you think about who forces you to move the fastest, it is always your multinational clients. It is these mega-companies that really drive the banks to introduce new technology."

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