Web Services Benefit Wells Fargo and Its Customers

A budding implementation of Web services technology at San Francisco-based Wells Fargo & Co. ($370 billion in assets) is helping to streamline the process of initiating electronic transactions with wholesale banking customers.

Wells Fargo wholesale services is in the early stages of deploying Fairfax, Va.-based WebMethods Inc.'s WebMethods Integration Platform. The software is a significant enhancement over an internally developed system-dubbed Payment Manager-that scores of customers use to send data and instructions regarding wire transfers and automated clearinghouse transactions, among others. While that system works well, it requires custom development to tie Wells Fargo's systems to every customer that wants to transact business electronically.

"It's not what anyone would call a scalable platform," said Steve Ellis, executive vice president, Wells Fargo wholesale services, referring to the previous system.

The wholesale business got into Web services through ongoing involvement with the bank's emerging technologies organization. The latter group had been experimenting with Web services, seeking potential applications and opportunities among constituencies within the giant bank. Ellis and his group seized the opportunity. "With Web services, we wouldn't have to custom-code for everybody," he said. "We'd just be reusing code that we already built."

Key Web services protocols in use at Wells Fargo-including SOAP and UDDI-present standard interfaces that applications can be coded to, facilitating data exchange between disparate applications within the bank as well as with customers and partners.

With the rationale of encouraging customers to transact electronically, the bank decided in April 2002 to move ahead in deploying the WebMethods platform, and in November 2002 went into production with its first customer, whose name Ellis declined to divulge.

While the bank's legacy integration platform is largely focused on the biggest customers, the bank also had many middle-market customers in the $200 million to $400 million revenue range, and wanted to make it easier to connect to them. "There's a lot of work on both sides," Ellis said. "We were looking for a more streamlined version of Payment Manager that was easier to install and implement."

With the WebMethods software, Wells Fargo is able to accept roughly 50 different formats of files from customers; popular file types include SAP and J.D. Edwards ERP file formats. Those files are typically sent using file transfer protocol, or FTP. Some of the largest customers have a direct leased line into Wells Fargo, and they send information directly into the Payment Manager transaction hub.

Also with the WebMethods-powered Payment Manager system, Wells Fargo is able to make its electronic connections more interactive, Ellis explained. "We can send a message back that says we got your file. Or the message may say 98 payments were fine but these two didn't work right."

So far, Wells Fargo has converted a "handful" of customers to the Web services-based Payment Manager platform; it expects all 100 to be migrated by year end. The time to get a new customer up and running is five to six weeks or less, compared with eight weeks or so previously. The system also facilitates later "delivery" times. That is, the bank previously had earlier cut-off times for same-day delivery of funds, but now has greater flexibility in making decisions on when payments can be made.

Wells Fargo has taken an aggressive posture regarding future use of Web services and the WebMethods software. The company has purchased a unit-wide license for WebMethods' software. "We've identified two-dozen different applications or tools we use where we could leverage Web services to really help improve what we do," Ellis said.

Among the possibilities for future Web services, Ellis said, are an event-notification application, whereby Wells Fargo could notify customers of events, such as the arrival of information they have been awaiting. That's an improvement over the current method of customers having to log in to a Wells Fargo Web site and find the information they're looking for.

Ellis described Web services' benefits in more of a business context than as a technology-focused strategy. "We're looking at the Web services platform as one of the core tools for how we connect ourselves better around the customer."

Ellis declined to specify the bank's investment in the WebMethods platform, but he characterized the project as "medium" in size. "It took a lot of work but it wasn't a budget-buster," he said.

Editor's Note: This article originally appeared on InternetWeek.com, a CMP Media property.

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Fast Facts

INSTITUTION: Wells Fargo & Co. wholesale services, San Francisco.

ASSETS: $370 billion.

BUSINESS CHALLENGE: Develop standardized Web services technology to initiate electronic transactions.

SOLUTION: WebMethods Integration Platform from WebMethods Inc., Fairfax, Va.

KEY QUOTE: "With Web services, we wouldn't have to custom-code for everybody. We'd just be reusing code that we already built. That makes it easier to maintain and easier to add new features." -Steve Ellis, EVP, wholesale services, Wells Fargo & Co.