Banks Need to Bring Web 2.0 to Treasury Services

It looks like things in the treasury management space are poised to become a bit more exciting. During a presentation on Web 2.0 in the payments space at NACHA Payments 2009 called "Payments 2.0? - What Payments Professionals Need to Know About Web 2.0 Technology," Bank of America's Milton Santiago, SVP, responsible for portal strategy, and Cindy Murray, innovation and development executive, not only explained to attendees the fundamentals of Web 2.0 concepts, but they also explained the ways in which banks can exploit the technologies that constitute the "new Internet"-social networking sites like Facebook and LinkedIn, RSS feeds and Rich Internet Applications like Twitter.Web 2.0 apps have typically been used on the retail banking side. For instance, Wells Fargo has a blog and Bank of America has a presence on Twitter. The idea is to help its customers interact more with the bank and with each other. Santiago and Murray said the same principals can be applied to commercial customers in the treasury services space by creating a more collaborative experience for large corporates and other business customers. According to BofA focus groups, Santiago said corporates have been asking for more opportunities to interact with their peers. They also say they are ready to take on some of what Web 2.0 has to offer in the way of real-time information analysis.

According to Murray, Web 2.0 will move banks from being product-centric to bring workflow-centric, where a corporate can look at a transaction and simply click through for more information on it. "Graphical displays of information are ways to use Web 2.0," she said. "You want to offer payments differently."

For instance, she explained that banks can perhaps offer payments wizards that can help the client determine the best way to make a given payment. "The wizards provide instructions and provide intelligence behind the scenes. This is dynamic real-time information [that can alert the client when there is more detail available about a payment.]," said Murray.

"This will demystify treasury management," noted Santiago. Treasury management is due for an overhaul, he indicated. As a new age group enters the treasury workforce, they're finding the existing systems are antiquated.

Part of the problem is the fact that in many cases, corporate users need to use multiple logins to access multiple modules or websites to manage their transaction information. Eliminating these silos will help. "Treasurers are saying it's more difficult to train new professionals on all the nuances of the different kinds of payments. So the vision for the future is to be workflow centric," said Murray. "The client doesn't have end-to-end visibility if the transactions are done on different channels."

They also noted that it's important to remember that corporate customers aren't just doing treasury business with banks. They're doing investments and other activities and the banks aren't offering much in the way of integration to them.

This could be construed as a different take on the idea of offering treasury clients more information around payments. But I think the point is that banks can use Web 2.0 tools to achieve these goals. For instance, they can offer podcasts and video podcasts (vodcasts) with industry-specific information for clients; provide industry-specific discussion groups and blogs; and smarter, more flexible apps that offer features like on-screen error checking, integrated help and client services access; customized dashboards.

Some of this is possible today, but the industry will most likely capitalize on these technologies a year or two from now, concluded Murray.

Santiago took things a step further and speculated on what to expect from Web 3.0. Web 3.0 will take automation to different levels. "Think 'The Matrix' or 'Minority Report,' he said, noting the sci-fi blockbusters where computers control most aspects of humans' lives. It's the ability to go across multiple data marts to collect all the pertinent information on a customer. Another example would be having a system with the capability provide an active alert service for the originator and beneficiary of a wire payment if it detects that the funds haven't settled. Santiago said Web 3.0 will provide even more intelligence for analytics and will provide more predictive capabilities.

"Going out and watching workflow is the best way to identify how product-centric your approach is," suggests Murray. This is how bankers can see just how many screens they need to click through to access the information they need.