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| Bank of East Asia improves payments infrastructure in China |
| 10-MAR-2010 Intellasia | Finance Asia |
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| 10 Mar, 2010 - 7:00:00 AM |
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Bank of East Asia's new payments system allows for greater integration and customisation for its corporate treasury clients.
Hong Kong's Bank of East Asia (BEA) has implemented vendor Clear2Pay's open payment framework in China, allowing it to improve control of payment transactions.
The bank implemented the new technology infrastructure in Shenzhen where it will support its growing China business. The framework allows BEA to build a payments hub to improve flows between its back-office systems and its corporate internet banking and electronic commercial bill system, a move that will allow it to better meet its wholesale banking customer's treasury needs. The solution does not cover the bank's Hong Kong operations.
"This is an important step for us as we embark on a wider process of upgrading our payments environment into a bank payment hub with all the business and functional benefits such an exercise brings," said a representative of BEA in a statement.
Mun Kiat Chan, vice-president of sales for Clear2Pay in China, explained that the open payment framework will allow the bank to better tailor payment solutions for their corporate customers as well as give them a greater level of control over their cash.
"The core proposition of OPF [open payment framework] is to allow BEA to tailor its business processes for their corporate customers," he said. "We implemented the OPF platform to wire-up some of BEA's internal systems -- their corporate internet banking and their electronic commercial draft system. Both of these are customer facing systems, corporates will make use of both systems to do transactions with the bank."
Other banks in the region that have implemented Clear2Pay's payment solutions include the central bank of Thailand, Shenzhen Ping An Bank and Taiwan's Tai Yuan City Bank.
The ultimate decision on how it uses the new system lies in the hands of BEA's wholesale banking technology department, but based on its plans to use Clear2Pay's open payment framework to build a payments hub, better solutions for corporate treasurers in China could be in the offing.
According to Chan, BEA will begin using the system to "build up" business flows within the bank in the second quarter. Phase one, which included the initial implementation of the platform, was completed in the fourth quarter of 2009.
Last year the bank implemented software from the vendor to connect to the central bank of China's electronic commercial draft, better known as letters of credit, system. The system standardises buy-in, sell-out, buy-back, issuance and discounting formats for commercial drafts in the country.
In 2009, BEA reported operating income of HK$130 million ($16.7 million), up considerably from a loss of HK$1 billion a year earlier, for its treasury markets business in Hong Kong. It does not break out treasury's contribution to its China operations, which reported total operating revenues of HK$3.5 billion over the same period.
"Treasury is not really the biggest part of BEA's balance sheet [but] their second half treasury business faired pretty well," said an analyst.
BEA made a before-tax profit of HK$3.5 billion off HK$12.1 billion in revenue in 2009.
http://www.financeasia.com/News/168229,bank-of-east-asia-improves-payments-infrastructure-in-china.aspx
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