Citibank is one of the first global banks to sign on to abix, a real-time electronic exchange that enhances communications between banks and their customers.
Created by alterna Technologies, a Canadian treasury and cash management software company, abix enables banks to standardize and re-use interfaces for processing transactions, such as account balance, payments and related messages, among member banks and their mutual clients who use alterna's platform.
"Clients need real-time information and real-time execution," said Dorothy Rule, head of global treasury solutions at New York-based Citibank. "It will help Citibank's clients streamline the payment and reporting process and maximize the way companies manage their cash."
Separately, Citibank has joined the eTreasury eXchange (eTX), becoming the first bank to sign on to SunGard Treasury System's newly created electronic exchange. (See story, www.banktech.com/story/BNK20021105S0004.)
eTX will provide "our clients more flexibility in managing their cash management business anywhere in the world," according to Simon Williams, CEO of Citibank e-Business.
The deals are a sign that large banks are forming closer ties to the companies that supply treasury technology. The financial services industry can expect more of the same in the near future.
"We want to have a more formalized relationship with those key software providers," Rule said. "Each treasury provider needs to work with multiple banks."
Since 12 of Citibank's larger global clients have deployed alterna's product solutions, it made sense for the global banking giant to join abix.
Those clients have a "lot of different touch points globally," said Rule. "We needed to come up with a single process for connectivity and put it in globally."
The move to join electronic exchanges, through which banks and clients can transact business over the Internet in real-time, is an extension of the strategy of connectivity over the browser, Rule noted. "Browsers provide quick access to information."
The Internet spells the end to dial-in service, where corporate clients connected to banks by directly dialing in, Rule said. "Banks have to recognize they need more than a single-prong strategy."
Today's technology, she added, allows Citibank to deliver straight-through processing and provide business and consumer clients with seamless access to cash management services.
The bank has been working with alterna for a little over a year, establishing standards and protocols and building interfaces. The International Air Transport Association is the first mutual client to take advantage of the abix offering.
Citibank has certified a number of its interfaces and plans to make the abix connectivity available in more than 90 countries by the end of the year.
One of the challenges, Rule said, is that every country in which Citibank operates a domestic bank has a different clearing system "that has it's own nuances in terms of formats."
But in the end, electronic exchanges will improve efficiency and allow financial institutions and their clients to swap information earlier in the day.
In addition, eliminating manual processes and speeding up the reconciliation procedure will free up staff from mundane operational tasks and allow them to focus on working directly with their business units.