Banks like BofA Merrill Lynch are offering service-oriented architecture to bring together disparate systems.
While the big bank story lately is how much regulation they have to contend with now and in the future, another story is the challenge banks face in offering effective technology solutions to companies with multiple legacy systems.
Facing years and years and layer upon layer of technology innovation, banks find themselves with the challenge of servicing clients with multiple legacy platforms that restrict banks’ ability to quickly bring new solutions to market. Such a morass of systems also restricts banks looking to gain a 360-degree view of their commercial customers’ systems. Banks have done a good job of addressing these issues on the consumer side of their business. But the commercial side is much more complex and has been a far slower process.
One way they’ve been meeting this challenge is through service-oriented architecture (SOA). SOA, which can overlay legacy systems by harmonizing and centralizing data, and enhance straight-through processing, has been the most expedient solution to date. This approach allows banks to quickly bring products and services to market while freeing them from the pressure and expense of addressing (or replacing to fit the architecture) entire legacy systems. In this context, SOA changes a company’s technology universe from being a restrictor to an enabler.
One bank making effective use of SOA is Bank of America Merrill Lynch, which has partnered with software and services provider Fundtech to offer an SOA solution for payments known as the “payments services hub.” BofA, which built the front user interface, has seven different online payment applications for payment types such as wires, FX, ACH and international transactions. Fundtech, which was acquired by private equity firm GTCR in September, provides the underlying architecture.
According to Cindy Murray, executive vice president for e-commerce and global corporate banking at BofA, the SOA solution has created “chattiness” between diverse systems and now supports more than 200 different payment formats. “The solution has significantly improved the customer experience,” Ms. Murray said at a breakfast at this week’s AFP Conference in Boston. Ed Gainer, executive vice president, North America Cash Management, added that Fundtech has invested heavily in SOA for payments and is now moving into cash management.
Despite some of its very public issues regarding its business practices, BofA continues to be one of the top banks for corporations. In a survey released this week, Greenwich Associates said BofA has the deepest penetration into corporate business. The more it can tame companies’ tangled legacy systems, the more business it will generate.
Fundtech has also been busy in the past year. One area where it is out ahead is mobile treasury. Fundtech in October 2010 launched a mobile banking platform for Smart phones and tablets called Mobile ACCESSplus, which allows a treasurer to take action on information vs. just seeing it in a read-only format.