BofA Tests Online Banking, Online Payments for Corporate Clients
The bank's new electronic bank account management system lets business customers manage, track and make changes to their accounts online. Traditionally, BofA's corporate clients have tended to manage their bank accounts using an Access database or Excel spreadsheet. However, such solutions don't help a company communicate to its bank when it needs to make changes to its account, such as adding a new signer or a resetting rules around what a signer is authorized to access. The new eBAM system will allow them to do all of these things online. Customers that have their own bank account management software will be able to send XML messages to the bank requesting account changes or adding new accounts.
The most technologically difficult part of building the eBAM capability has been security, says Cindy Murray, Bank of America Merrill Lynch's ecommerce and portal executive in global corporate banking. The bank has been working with IdenTrust to offer digital signatures. "That's been challenging in terms of getting the legal work done, as well as getting it fully tested," Murray says. "But we're past that and we're now training and implementing the system with pilot clients."
The bank expects to complete the eBAM pilot by the end of October, at which point it will make enhancements to the software based on client feedback.
One-Stop Shopping for Global Payments
As we have reported before (in September 2009 and April 2010), Bank of America has been building a global payment hub since June 2009; Fundtech is providing middleware for it. The hub will support low-value and high-value payments in many countries. It supports many local country formats like the Boleto Bancario online payment format popular in Brazil and the U.S. ACH format. "There's a lot we're implementing, that's why we're doing a lot of testing over the next several months," Murray says; the bank is testing all the code for the system. Then Bank of America will run several pilots for six to eight weeks with early adopters before rolling out the payment hub to its entire client base in the first quarter of 2011.
Within the payment hub, the bank is building straight-through processing rules that enable it to automatically validate payments as clients create messages or import files. "We'll be able to identify any field within each payment that needs to be corrected and help the customer correct it, so that we're not doing any repair on the back end," notes Murray. "Clients like that because banks will charge more if we're repairing the payment."
The payment hub will allow clients to attach documents such as PDFs and Excel files to payments. "As we migrate customers from paper to electronic, providing the remittance is critical so clients can apply that electronic payment," Murray says. "Many clearing systems truncate a lot of the detail a beneficiary needs to post their receivables, so being able to attach an invoice and send it with the payment will be an important feature." Customers will have the option of automatic communication with beneficiaries such that when a payment is sent to a beneficiary, an email will be sent to the beneficiary letting them know the payment date along with the invoice or any other documentation associated with that payment, helping the beneficiary reconcile the payment to their bank account.
This document-attaching capability will help clients migrate to online payments, Murray says. "One of biggest reasons clients want to hold on to the check is that all their remittance information is printed on the check, and if it goes into the lockbox, then the bank is keying that information off of the check stub," she points out. "When clients move to electronic, not all suppliers are set up to receive detailed remittance information and their bank may not support it, especially if it's a community bank." And outside of the U.S., clearing systems tend to be less mature and tend to be unable to pass on significant amounts of data.
When the payment hub is complete, Murray believes it will be more advanced than most competitors'. Using Oracle business intelligence software, "We'll provide the ability to personalize dashboards both in information reporting and payments," Murray says. "Many clients want to track the status of a payment to see what percentage of sent payments have been processed end to end, meaning the beneficiary bank has received the funds. We can show graphically how many payments have been received by the beneficiary bank, how many payments have been rejected, how many payments are in the process phase." Users want to have that kind of dashboard to display the status of their payment information, Murray says. For example, a company might want see a graphic representing all payments it's initiated over the past week or month and how many went through low-value clearing networks versus SWIFT. Or a user may want to look at her total cash position per currency. The bank will let users create their own dashboards.
The end goal of these projects for Bank of America is to win new business, grow U.S. market share and improve customer satisfaction levels. "We have a lot of opportunity outside of the U.S. to grow market share and we want to maintain and grow market share in the U.S.," Murray says. "We also want to focus on providing clients with a more efficient tool to initiate and receive payments."