Forte Financial Blog

Demo Videos from FinnovateStartup Posted Online - Very Cool

Back in April I attended Finnovate Startup here in San Francisco and live blogged the event. It was a whirlwind of 40 startup/young financial technology companies presenting 5 min demos (no scripted PowerPoint!) of their products/new features. Lots of energy, great people, and some really cool stuff.

This week the videos were posted online, so now you can watch from the comfort of your office, cafe, or sofa. Check 'em out here.

Vendors represented include:

How To Turn Your Online Bill Pay Expense into a Revenue Stream [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

How To Turn Your Online Bill Pay Expense into a Revenue Stream [NACHA Payments]

Peter Gordon
Partner, eCom Advisors

Synopsis from Conference Program

For a decade, banks' rapidly increasing expenditures on EBP have been justified on concepts like stickiness, consumer retention, consumer satisfaction, increased balances and product cross-selling. Although these concepts are attractive, most banks are not able to measure the ROI of EBP. As a result, banks cannot directly associate incremental revenue to their EBP expense. This session demonstrates how banks can monetize their EBP expenditure and data. Topics addressed include: monetization strategies; how to use bill pay cross-sell/up-sell; identifying unusual behavior for retention; identifying characteristics of "best customers" that can be utilized to acquire similar customers in the online channel; and identifying behaviors that can be utilized to reduce fraud.

My Observations & Comments

Long time readers of this blog know I am a proponent of competing on analytics (see posts here and here). I was particularly interested in this session by eCom Advisors' Peter Gordon on how banks can leverage their consumer bill pay data. Bankers, pay attention because this is good stuff:

The Bill Pay Challenge

Consumer bill pay is typically a free service offered by banks in the hope of retaining customers and cross selling. Its matured from a competitive advantage to table stakes. Banks must continually upgrade their bill pay services to meet customer expectations, but what is the ROI from this investment?

Tapping into consumer bill pay data enables banks to monetize their bill pay investment and drive further returns through more effective marketing, enhanced risk management, informed strategic investments, and fraud mitigation.

Bill pay data contains three valuable elements: 1) Who your customers pay, 2) how much they spend, and 3) the frequency and timing of the spend.

4 Ways to Unlock the Value of Bill Pay Data

1. Strategic Marketing - Marketing departments at banks typically buy data about thiner customers. yet through bill pay transactions, banks can determine which of their customers have accounts at other institutions as well as the type of products they have (mortgages, credit cards, auto loans, etc.). This data can be used to develop targeted cross sell offers delivered via the online channel or other means.

2. Risk Management - Almost all banks are utilizing the same credit bureau data to evaluate the creditworthiness of their customers. But as many as 25% of US adults of little or no credit data on file (they are young, they rent rather than own, etc. Banks can use consumers bill pay data to develop alternate scoring models based on the timeliness of their rent payments and other factors and meet the as yet untapped need of undeserved customers with little or no credit history.

3. Investment - Economic data is typically published at least a month after the fact, and often amended later. GDP is published with a two month lag. Yet savvy bankers have learned to analyze their consumer bill pay data in real time in order to inform trading decisions for their own investment portfolio and won big (example: top 5 bank earned $200 million on a bill pay informed trade). In addition, banks may choose to sell their data. Aggregated anonymous data (e.g. real time spending habits by industry or consumer segment) is of significant value to marketers, economists, and investors.

4. Fraud Mitigation - Finally, many banks utilize outside sources for fraud monitoring. By using bill payment data banks can develop models to alert when new, potentially fraudulent payees are created or when unusual transaction patterns occur. If the bank's fraud department is currently buying data from fraud monitoring vendors it may be possible to sell the vendor its own data in order to reduce the cost of early warning system/negative files.

Q&A and Tips

If your bank utilizes CheckFree for its bill payment services, it is possible to get a file (on a weekly or monthly basis) of your transactional data.

Banks have disparate data sources across the institution. They key to success (and challenge) is to maintain one master customer record.

This is not rocket science - but banks should take an iterative approach and learn as they go through pilots and continuous improvement.

A data warehouse is not necessary. Banks can get started right away using a simple data base tool such as Access.

>> Return to index of my posts from NACHA Payments 2008

NACHA's Business-to-Business Payments Strategy [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

NACHA's Business-to-Business Payments Strategy [NACHA Payments]

Alenka Grealish
Manager Director, Banking Services, Celent, LLC
Julie Hedlund AAP
Senior Director, Business Payments, NACHA - The Electronic Payments Association

Synopsis from Conference Program

While electronic B2B payments through the ACH continue to increase each year, the majority of B2B payments are still made by check. NACHA has defined a business payments strategy and is moving forward with proposed solutions to increase B2B payments via the ACH Network. This session presents the solutions under development and those that are contemplated to make the ACH Network a more viable consideration for business-to-business payments.

My Observations & Comments

NACHA is working with Celent to conduct market research focused on the small business market. Phase 1 consisted of four focus groups, Phase II was a qualitative survey of small businesses, and Phase III will be a market demand assessment (later this summer). This session featured small business payment research (from Phase II) that was literally hot of the press -- NACHA didn't see the data until the afternoon before because Celent had just finished tabulating the results of the survey. As yet, NACHA and Celent haven't digested the findings but for now they shared the high level results. It was very interesting.

NACHA B2B Payments Vision

Hedlund advised that as yet NACHA has not formulated a B2B strategy - they are in the midst of gathering data to inform the future strategy - but they have formulated a vision, as follows: 

• Buyers and sellers to have ready access to the payment requirements of thiner trading partners; 
• Sellers to specify remittance information to accompany payments; 
• End-to-end processing of invoices and related electronic payments.

NACHA B2B Initiatives

Ultimately, the objective of the B2B market research effort is to understand the market demand for NACHA B2B initiatives currently underway and proposed (listed below) and determine how and where to apply NACHA resources: 

• BIZ (Invoice Flipping) - Seller sends a payment request to buyer via ACH network with specified remittance. Buyer sends corresponding ACH credit. 
• EBIDS- Buyer views summary data from online banking site, pays via ACH credit. 
• Secure Vault Payments (SVP) -Buyer views invoice at seller's website, routed to their bank to initiate ACH credit payment. 
• Payment Directory - an enabler of the other payments initiatives

Research Findings

Over all, small businesses have a lukewarm opinion of their bank. They do not associate the bank with improving business processes. Small businesses are receptive to electronic payment, especially if it is integrated into their accounting software (overwhelming QuickBooks) in a turn key fashion.

Small business are preoccupied with getting paid, not how they get paid. They are open to ACH credits (as distinct from ACH debits, once they understood the difference) and are not as concerned with security when dealing with ACH.

The largest source of payment pain is in reconciling the incoming payments with open invoices. Business people surveyed indicated unwillingness to pay for ACH payment but they are willing to pay for a solution that eases the reconciliation effort. The challenge is for banks (and other providers of payment solutions) to prove the ROI to the small business owner.

Impressions of specific NACHA initiatives:

BIZ - As long as the solution is streamlined, and simple they like it. Like electronic payments, prefer an open network where they can pay anyone.
EBIDS - Convenient, once some changes are made to support complex invoices and the ability to view and select multiple invoices for one payment. Sellers are not interested in hosting/archiving eInvoices.
SVP - This was perceived as a niche solution. Viable for online payment in situations where a credit card is not accepted.

eInvoicing

Demand is largely convenience driven, 10% of small businesses are consistently interested in process improvement. Financial institutions that can capture the attention of this segment of the market can retain them for life as long as they, too, continuously improve their products. Sellers are moderately challenged when it comes to eInvoicing delivery. Buyers are much less challenged (it's easier to receive than to send).

ePayment

Interest in electronic payment is lacking - although sellers are more interested in buyers (it's all about facilitating incoming cash). Financial institutions and payment providers haven't made a compelling enough business case to overcome the status quo - checks work,. why fix something that is not broken? One third of business people perceive that it is easy to switch to electronic payments, they do not perceive float s a big deal. Some increased concern re: security, but not much. The major concerns are around the cost of changing their accounting process and the time/effort involved in entering data into the system. This underscores the importance of turn key solutions and a sales story focused on efficiency and streamlining back office tasks.

Q&A and Audience Comments

The study did not address trading partner size, although one can assume that small business electronic payment is often driven by the preference of their larger trading partners.

Standards must be as open as possible - without proprietary solutions from banks or software providers - in order to migrate large numbers of small business transactions from electronic to paper. Hedlund underscored that "NACHA is not interested in developing proprietary solutions."

One unsolicited finding from the market research is that AmEx is held out by small businesses for their dispute resolution services - they purposefully choose to use their AmEx card to protect themselves. Small businesses are very happy with AmEx and it was noteworthy that they do not view their bank(s) with the same degree of satisfaction.

NACHA is working with QuickBooks and its competitors to address small business payment needs. Indicated that QuickBooks is "interested and willing to listen, recognize that we are on the cusp of a significant change of behavior and want to drive it."

Related Presentations

I missed the session, but PaySimple also presented market research on small business payments. You can download the slides here.

>> Return to index of my posts from NACHA Payments 2008

From Check to Electronic Payments: The B2B Outlook [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

From Check to Electronic Payments: The B2B Outlook [NACHA Payments]

Arlene S. Chapman CTP
Senior Consultant, Technical Services, Association for Financial Professionals
Daniel W. Ellecamp CCM
Financial Consultant, California State Automobile Association
Rue Jenkins
Assistant Treasurer, Costco Wholesale Corporation
Claudia Swendseid
Senior Vice President, Federal Reserve Bank of Minneapolis

Synopsis from Conference Program

The U.S. payments system is evolving rapidly from paper to electronic payments. How is this change affecting business-to-business (B2B) payments usage, which has long favored paper checks? Industry experts from the Association For Financial Professionals (AFP) and the Federal Reserve (FR) highlight results from recent research on the current state of B2B payments and implications for the future. How much progress has been made since the FR estimated B2B checks in 2001 and the AFP surveyed B2B payments practices of its members in 2004? Adding a "real world" perspective, two corporate practitioners discuss their B2B payment practices and rationales, and offer their "color commentary" on the AFP and Fed research. Panelists cover a range of issues including: (1) key barriers to greater use of electronic B2B payments; (2) integrating the payment with other financial processes; and (3) the outlook for B2B electronic payments adoption. Panelists also offer suggestions for action to accelerate the migration of B2B checks to electronic alternatives.

My Observations & Comments

This was another very good session - with seasoned corporates sharing their views alongside industry experts from AFP and the Fed. I won't attempt to capture all of the statistics as they are readily available from the Federal Reserve, previous presentations,  and AFP. Over all, B2B transactions make up 12% of non-cash transactions (10.9 billion) and 84% of the value ($156 Trillion). From 2000 to 2006 the number of check B2B payments declined somewhat, but not as quickly as consumer checks have declined. Cards are the fastest growing B2B electronic payments method, increasing at over 25% /year. ACH is also growing steadily, although not all B2B ACH transactions include addenda (remittance data):

Wires remain relatively flat in volume, although with the addition of remittance data in 2010 there may be a surge in usage.

Costco

Costco is gradually shifting its payments from check to ACH. Their challenge is that not all vendors have the ability to receive remittance data electronically and post it to their systems automatically. Costco makes electronic payments either by ACH or by Purchase Card. Pcards are very easy for Costco but challenging for the supplier as they have to pay interchange.

Jenkins from Costco likened corporate payment processing to a production environment in factory, just like building  a car on an assembly line. There are many opportunities to decrease waste and drive up efficiency. Electronic payments are very efficient, have less fraud, do not get lost (checks get lost), and the remittance does not get lost (like in a paper environment). In comparison, dealing with paper is cumbersome.

Costco runs checks daily today, but has considered moving to a model where ACH payments are run daily and check runs are limited to 2-3 days per week. Jenkins suggests that payment method be incorporated into the procurement purchasing and contracting discussion as each vendor contract is negotiated (or renegotiated).

At Costco Treasury advocates for electronic payment (either sending or receiving) and advises other departments (AR, AP, etc.) as they weigh alternatives.

Over time, as the Federal Reserve closes processing sites and image clearing continues to increase, the float benefit of checks will diminish, supporting the transition to electronic payment methods.

Cal State AAA

Over the last 5-6 years AAA has made an effort to transition toward more electronic payments. They tried a one card solution, but it didn't work as well for the purchasing department. Now they use both a T&E card and a purchase card. They also send ACH transactions without addenda in many cases, but follow up wiht remittance information however the supplier wants to receive it (email, fax, etc.). They also use a ghost card via Peoplesoft.

Ellecamp from AAA observed that it is much easier to send electronic payments than receive them. They have put little attention toward AR so far.

AAA tries to be as flexible as possible in sending remittance data to its suppliers "we give them every opportunity so they cannot say no." Ellecamp explained that by implementing ACH payment with key suppliers (glass replacement, car rental, body shops) AAA saves $100,000 a month and significantly streamlined its payables process. 

When asked how he would feel if suppliers mandated sending electronic payments to the AAA AP department, Ellecamp responded "I'd love that!"

Ellecamp observes that electronic payments are "not sexy, not exciting" and that he often has to cajole other departments to change their processes. But the savings are hard dollars that continue indefinitely (for years to come) and that's appealing.  He also advocates getting an advocate to support the cause, e.g the CFO. [I advocate marshalling the support of senior leadership, too. See more here.]

Both Costco and AAA agreed that better products from banks, particularly those that support small and mid-sized businesses will help ease the transition to electronic B2B payments.

>> Return to index of my posts from NACHA Payments 2008

Remittance Standards for Wire Payments [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

Remittance Standards for Wire Payments [NACHA Payments]

Hank Farrar
Senior Vice President, CHIPS
Lauren Hargraves
Senior Vice President, Federal Reserve Bank of New York
James Wills
Business Manager, Standards, SWIFT

Synopsis from Conference Program

Three payments industry utilities have teamed up to foster discussion and action among financial institutions to help manage the migration of checks to electronic payments and ensure that the payment channels are ready. Join representatives from the Federal Reserve, The Clearing House and SWIFT in a lively and provocative discussion about corporate trends in wire payments, remittance standards initiatives, and steps financial institutions can take to influence the payments landscape. This includes initiatives to ensure that payments systems can carry remittance invoice information in a standard format to make it easier for corporations to reconcile and post electronic payments.

My Observations & Comments

There were a remarkable number of people in attendance for this session late in the day; I suspect many were curious given the recent announcement from the Fed on remittance standards for wires. 

The effort to add remittance to wires is a great example of project leadership - hats off to Hargraves, Farrar, and Wills for their tenacity in making this come about.

Global Efforts to Promote eInvoicing and ePayment:

International Payments Framework (IPF) - Phase II of IPF is just commencing and will improve the cross-border payments process through operating rules that will enable interoperability between domestic and international ACH systems. The idea is for each country to retain its local ACH infrastructure and use a central translation model (potentially ISO 20022).

European Electronic Invoicing (EEI) - An informal task force of industry experts has been established to create a common European Electronic Invoicing (EEI) Framework. Representatives include stakeholders with relevant national experience and the commercial incentive to participate. Estimated benefits exceed 243 Euros/year.

International ACH Transactions (IATs) - As of March 2009 all international payments made via the ACH Network must be identified as International ACH Transactions using a new Standard Entry Class (SEC) Code called IAT. This will enable financial institutions to easily identify all international payments flowing through the ACH Network and all parties involved in the transactions, making it easier to comply with U.S. law (OFAC). NACHA intends to map the IAT format to ISO 20022 in order to facilitate payments to/from SEPA.

NACHA is already having conversations with the EU to explore global standards for electronic invoicing and on a domestic level is exploring opportunities to support small and medium sized businesses (see notes from NACHA B2B Strategy session).

Collaborative Effort

The Federal Reserve worked in close collaboration with SWIFT and CHIPS in order to make remittance data for wires a reality. They recognized the need for structure to enable automation of payments and cash application. From the outset they sought feedback and input from large value networks around the world and realized that many were simultaneously looking for guidance on global standards.

The approach is to map existing proprietary standards to emerging standards in order to increase interoperability on an International basis and between STP 820 and ISO 20022. Mapping for STP 820 to ISO 20022 is on the FedWire web site here.  In addition, guidelines for mapping for NACHA's IAT format to ISO 20022 will be developed.

Took advantage of the need to support cover payments - a regulatory compliance requirement - to get funding to modify the fed wire format for wire remittance as well (clever!).

Specifications for wire remittance will be available later this year. The Federal Reserve anticipates six months of testing.

The Q&A for this session was informative, too:

Audience members commented that the IAT format would be less viable once wire remittances are available since IAT only allows 160 characters of remittance data.

Another person suggested that UPIC (a substitute bank account and routing number that can be used to mask the sender or receivers true bank details) should be available for wires as well as ACH.

Comments also emphasized the value of XML in harmonizing the various payment messages so that structured invoice data can in turn be adapted for remittance messages and in turn loaded into business' AR systems for automated posting.

And, last but not least, the Federal Reserve urges financial institutions to start thinking strategically about how they will incorporate remittance data into their services for businesses.

>> Return to index of my posts from NACHA Payments 2008

Corporate Mobile Banking: Separating Hype from Reality [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

Corporate Mobile Banking: Separating Hype from Reality [NACHA Payments]

Jacob Jegher
Senior Analyst, Celent

Amy L. Johnson
Vice President, Wells Fargo

Synopsis from Conference Program

Mobile banking is generating a wave of excitement in the North American marketplace. While much of the emphasis is on the retail market, corporate customers stand to benefit tremendously from this nascent channel. This session provides an overview, based on independent research from Celent, of the latest corporate mobile banking technology trends. The state of mobile cash management solutions is examined through a different lens, by distinguishing hype from reality. This session provides a detailed picture of what future mobile cash management solutions will look like, as well as descriptions of key features and functionalities that will attract users to this blossoming technology. Finally, it will help banks to ensure that their corporate mobile customers are provided with the proper security and authentication mechanisms while maintaining ease of use. A case study is presented by a pioneering institution in the mobile banking service for business sector, including an overview of its solution, descriptions of functionalities, lessons learned and business benefits.

My Observations & Comments

This was one of the best sessions I attended - an ideal balance of research/industry observations from Celent and real-world experience from Wells Fargo.

Celent

Eighty one percent of corporate executives are linked to their office through a mobile device. However, in the US 40% of business people are connecting to their corporate email using a personal device (an iPhone or other smart phone that they themselves purchased). This poses security challenges for corporate IT and those that seek to promote mobile banking and payments for corporates.

Mobile is proven to be effective in driving productivity, enabling remote work, and connecting disbursed teams. According to Celent four trends will drive the adoption of mobile banking and payments for corporates: 1) the evolution of full featured devices, 2) "BlackBerry mania", 3) Faster networks that provide a better user experience, and 4) the increasing prevalence of data plans.

Yet banks are slow to adopt new technologies, and mobile banking is no exception. Many banks are cautious about mobile banking in general, let alone offering mobile services for corporate customers. Security is obviously a major concern. Moreover, most vendors focused on corporate payment solutions do not feature mobile solutions and most mobile vendors are focused on consumer solutions. And mobile solutions are still immature. It is not clear whether text messaging, mobile browser, or device applications will be the dominant interface (or some combination). Celent predicts that mobile applications will be dominant, despite the challenge of developing multiple versions for each phone model and wireless carrier. And, thus far, corporates are not clamoring for mobile banking.

Demand for mobile banking:

Wells Fargo is the first bank to offer mobile banking to its corporate customers. Celent expects that seven additional banks will launch corporate mobile banking this year, and 6 more next year.

Wells Fargo

Wells Fargo believes that mobile banking and payments are inevitable and intends to lead in the mobile space. Their customers demand it and they have a mobile product road map to guide their progress. They are relying on text messaging and mobile browser for now, avoiding mobile applications (they are less enthused about applications than Celent is).

Mobile is particularly valuable for corporate clients as the need for dual controls and fraud prevention increases the number of approval steps for day-to-day payment activities. As the workforce becomes busier and virtual it is increasingly likely that corporate finance managers are away from their office (if only in a meeting down the hall) when they need to approve a payment or resolve a discrepancy/inquiry.

Wells Fargo's corporate mobile approach targets four types of transactions:

"Snack sized" functions (a Gartner term) - discrete tasks that take less than 5 minutes. The don't require enough time for it to make sense to boot up your laptop. You can do them while you stand in line, in between meetings, or waiting for your flight.

Time sensitive tasks - deadlines looming, expiring rates, or payments due.

Dual Control tasks - those that require two or more approvers, increasing the odds that one or more approver is away from their desk.

Fraud detection - utilize mobile to alert customers that there may be a real time fraud risk. Send just enough information to make a decision, or at least give manager an alert to phone the bank and learn more.

Wells Fargo is taking  an incremental approach, rolling out "a little something every quarter" and involving its customers to get continuous feedback. The solutions are very simple and elegant. For example, if you are approving a wire using the web browser on your mobile phone and have a question about it, the phone number of the person in your company is included in the record so you can click to dial that person directly and ask a question. When you conclude the phone call, the browser session resumes so that you can seamlessly approve the transaction. 

Lessons learned:

1) Involve customer service early. Train them to handle phone calls.

2) Do not expect high usage at first. It is a big shift for the customer. Use patterns vary from daily to occasionally.

3) Get your SMS short codes lined up early (lots of lead time necessary)

4) Be prepared to be nimble

>> Return to index of my posts from NACHA Payments 2008

The Return of The XML All-Star Team [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

The Return of The XML All-Star Team [NACHA Payments]

Susan Colles CPA, CBA
Senior Vice President, Bank of America
Robert Blair CCM
Vice President, JPMorgan Chase
Susan Boeri
Manager, Treasury Services, GE Corporate Treasury
Fred Laing, II AAP, CCM
President, Upper Midwest ACH Association
Leonard Schwartz
Director, ABN AMRO Bank

Synopsis from Conference Program

ISO 20022 XML messages for corporations and banks are now beginning to be exchanged on B2B interfaces on a daily basis. Corporations continue to seek automated solutions in order to increase their efficiencies and transparency of transaction processing. Banks have collaborated so that a consistent usage is applied to the message content, and they have worked with ERP vendors to validate the data support within the business applications. Discover the initiatives being advocated by corporations and the benefits they have realized with their ISO XML integration. Hear how U.S. clearing systems, including the ACH Network, are incorporating these standards into their processing environment.

My Observations & Comments

A survey by GTNews and ABN AMRO reveals that the needs of Accounts Receivable are still inadequately addressed by today's payments environment. Eighty-five percent of respondents feel that legacy EDI standards are not helping enough. 44% believe that XML is a promising solution for delivering dollars and data together. Standards are the only means to achieve straight-through-processing (STP) of payments and remittance data. 

The goal of ISO 20022 ("twenty-oh-twenty-two") is to facilitate transactions, not become the business process. It is syntax neutral (doesn't have to be XML, can adapt as technology evolves) and addresses a wide variety of financial business processes including payments, FX, trade, invoicing (under development), and securities. Thus far the payments transactions address credit, debit, and bank to corporate reporting. 

Will NACHA adopt XML for ACH remittance data? There is a great opportunity to leverage XML to include remittance data with ACH transactions. XML is less expensive to develop, easier to use, and easier to understand. NACHA has developed a business case for incorporating XML and formed a rules workgroup. A request for comment will be distributed this summer and all interested parties are encouraged to comment. The idea is not to replace the existing ACH formats, but rather to incorporate XML in the addenda records (there was much discussion on this point during the session). It doesn't make sense to reinvent the wheel, so NACHA is looking at the ISO 20022 version of XML, particularly as it is gaining traction as a global standard. 

Other uses of ISO 20022 In March 2009 NACHA will implement the International ACH Transaction (IAT Standard Entry Class Code) in order to address OFAC screening of transactions that involve parties outside the United States. The format of this transaction is based on ISO 20022. The Federal Reserve just announced that remittance data will be added to wires in either STP 820 (simplified EDI) or ISO 20022 format starting in late 2010. In addition, many banks are utilizing XML to drive the middleware layer between their various front end channels and back end legacy transaction processing systems.

File Mapping - SWIFT has published mapping guidelines to translate SWIFT FIN messages to XML and will shortly publish mapping guidelines for XML to IAT. NACHA committed to to the same.

Banks and Vendors Supporting ISO 20022 XML

Banks

Vendors

>> Return to index of my posts from NACHA Payments 2008

Getting to Know David Peterson of Goldleaf Financial [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

Getting to Know David Peterson of Goldleaf Financial [NACHA Payments]

Unlike the rest of my vendor conversations, David Peterson and I didn't talk about his company and its products (Goldleaf bought Alogent earlier this year). I reached out to him after seeing him speak at the TAWPI Conference last month and wanted to get better acquainted. We see eye-to-eye on the need to bring electronic payment functionality to small and mid-sized businesses in order to break B2B dependence on paper checks.

We also discussed the evolution of NACHA from a rules-based organization to its current product-focused strategy (I had just come from a small press gathering with the NACHA Leadership) and David shared his perspective. He voiced concern that the organization was less inclusive of vendors and the regional payment associations than it used to be. He is particularly unsettled by recent changes to the NACHA rules via the "administrative change" process that does not require approval or vetting by all of the stakeholders. Where they erred (in David's opinion) is that they used the administrative change rule option to change something that requires software changes.  This triggers two issues, one is that if a change requires a software coding change, by definition it is not an "administrative" rules change.  Secondly, the timeframe for an administrative change is short and asking all stakeholders to make software coding changes in the timeframe allowed for administrative changes is not reasonable.

I appreciate David's candor (although I imagine he is making the NACHA folks crazy) and look forward to more conversations in the future.

See also my notes from David's presentation on global deployment of remote deposit capture.

>> Return to index of my posts from NACHA Payments 2008

NetDeposit and the Future of Remote Deposit Capture [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

NetDeposit and the Future of Remote Deposit Capture [NACHA Payments]
 
After exchanging "small world" stories demonstrating all the ways that Danne Buchanan and I should have crossed paths before this week, we settled into a discussion of the future of remote deposit capture (RDC). By all estimates RDC growth is expected to continue for the foreseeable future, and NetDeposit is one of the industry's superstars, riding the wave of Check21 to offer remote check imaging and presentment solutions to banks of all sizes.

But as the industry matures, how will banks support the increasing number of RDC "seats" (scanners deployed at customer locations in offices across the country)? Banks are not in the business of supporting hardware and providing IT technical support to thousands of customer locations. As more and more banks roll out RDC capabilities and RDC migrates to the consumer market, how will the industry serve this base of customers?

One option is to go the route of credit card merchant acquiring, relying on independent sales organizations to sell to and provide servicing of RDC customers. Banks move one step away from their customers - and cross sell opportunities - but they avoid the headache of serving thousands of RDC seats. This scenario seems highly likely to me (and is already underway).

Another key development in the maturity of RDC will be how it is integrated with other payment channels (web, telephone, ACH debits and credits) in order to provide a holistic payment view to bank customers. Those banks that provide seamless reporting and exception management across silos will retain the most customers. And it's all about customer retention, in the end. After all, that's the big story with RDC - an opportunity to consolidate banking relationships regardless of the bank's footprint of physical branches. Robust product features will be the key differentiator.

For more on the future of remote deposit capture, check out this panel discussion at Bank Systems & Technology featuring Buchanan and three other industry leaders. See also this panel from the TAWPI conference last month.

>> Return to index of my posts from NACHA Payments 2008

WAUSAU's Evolving Remittance Solutions [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

WAUSAU's Evolving Remittance Solutions [NACHA Payments]
 
Kathy Strasser and I discussed the ways that WAUSAU is continuously evolving in order to meet the growing demand for paper to electronic payment solutions via remote capture, remittance, image/item processing and enterprise content management. Strasser is responsible for WAUSAU's remittance products, so naturally our conversation was focused on lockbox solutions.

WAUSAU has 48% market share across the retail, wholesale and "wholetail" (blend of one-to-one scanable retail-like items and more complex, non-scanable wholesale-like items) segments and is the leading source of ARC transactions (paper checks received at the lockbox and converted to ACH payments for settlement). With a long history of retail lockbox expertise, WAUSAU acquired DMP Payment Systems a year ago in order to expand its wholesale services. And, in its effort to meet the ever-evolving needs of its customers it announced a partnership with ClairMail to offer lockbox services via the mobile channel (more on that here).

The emphasis at WAUSAU is on providing solutions that act as an integrated, value-add extension to the corporate customer's receivables system, with workflow, exception processing, and document imaging to support core lockbox payment processing features. I cannot emphasize enough the value of offering a single platform for exception processing regardless of how the transaction is received for processing or settled.

WAUSAU offers remittance solutions via banks but also sells directly to corporations with volumes great enough to justify in-house or outsourced lockbox services. WAUSAU has optimized its solutions to meet the needs of industry verticals such as insurance, property management, utilities and is redoubling its efforts to support healthcare. The company will continue to build out industry specific capabilities through partnerships.

>> Return to index of my posts from NACHA Payments 2008

The Global Reach of Remote Deposit Automation [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

The Global Reach of Remote Deposit Automation [NACHA Payments]

David L. Peterson
Executive Vice President, Goldleaf Financial Solutions
Todd McGuire
Senior Expert, Global Concepts/McKinsey

Synopsis from Conference Program

Remote deposit capture has not only eliminated geographic boundaries within the U.S., but has also leaped across national borders and continents. In this financial institution case study, organizations interested in global remote deposit deployments learn valuable lessons and gain unique first-hand insights. Speakers examine logistics of global deployment, challenges to overcome to extend globally, impact on daily operations between countries, transportation logistics and costs, bridging differences in cross-border work flows, and the likely affect SEPA will have on work flow processes.

My Observations & Comments

Sadly, I only caught the tail end of this interesting session. Peterson and McGuire explored the pros and cons of remote deposit capture as a means to facilitate inclearing of US dollar check payments from all over the world. An estimated 10-15% of payments to foreign suppliers are checks (particularly mid-market companies that are less likely to maintain bank accounts in a number of countries) and the number is growing as International trade grows. Traditionally paper checks were couriered by foreign banks to US based correspondent banks for clearing, and funds availability varied considerably. With the enthusiastic success of remote deposit capture, many of these international checks drawn on US banks are being captured outside the US and presented as an image for payment under Check 21. No known rule or regulation prevents this.

There are three models: 1) The correspondent banking model (most widely used) leverages existing relationships between correspondent banking partners.For the US Bank, their customer is another bank, facilitating know your customer compliance, and the operational and time savings are clear. 2) The third party aggregator model comes into play when the foreign bank "doesn't get it" and utilizes a third party to gather and scan the checks for presentment. The aggregator makes money by offering availability sooner than if the checks were cleared via paper, not as soon as if the bank presented the items itself. 3) Direct deployment is the third and most infrequent model. Most banks are loathe to provision and support remote capture scanners to the offices of their multinational companies overseas. But in some cases where there are very few but very large check payments (e.g. the Middle East) a US bank will equip the local office of a large customer with a scanner.

The risks are genuine. Some banks have additional fees to cover OFAC suspect review (although whether the check is presented physically or via image, the OFAC risk remains the same). Returns risk for correspondent banking relationships are handled in a variety of ways, depending on the specific agreement between the bank partners.

>> Return to index of my posts from NACHA Payments 2008

OB10 is Middleware for the Financial Supply Chain [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

OB10 - ERP and FI Agnostic Global eInvoicing [NACHA Payments]

OB10 is a well established buyer-centric eInvoicing solution, but they are in the process of reaching out to AR as well as AP to offer ERP agnostic, electronic payment and remittance solutions for buyers and suppliers alike. OB10 supports any file "any-to-any data formatting" and supports client workflow solutions to route payment data for approval and dispute resolution as well as messaging between trading partners to help resolve problems with exception invoices. The company is developing more robust AR support that will provide electronic remittance files for posting to AR, as well as PO delivery and validation, and supplier financing support. These features will be rolled first in Europe.

I was struck by the openness of OB10's platform and how it is positioning itself as the middleware of supply chain finance. In order for B2B payments to transition to electronic in meaningful numbers, there has to be a way to seamlessly connect the proprietary formats utilized by banks, ERPs, and payment processors.

It is not surprising that OB10 perceives paper scanning and OCR as its biggest competitor. Recognizing that businesses have to manage a mix of paper and electronic transactions for the foreseeable future, OB10 partners with a document processing firm to handle paper. Yet the persistence of paper, and the introduction of data entry errors, only exacerbates the B2B payment challenge.

OB1o offers its brand name buyer customers supplier enrollment expertise, the "infantry" necessary to facilitate supplier implementation on a multinational basis.

>> Return to index of my posts from NACHA Payments 2008

ClairMail - Secure, Efficient, 2-way Mobile Banking & Payments [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

ClairMail - Secure, Efficient, 2-way Mobile Banking & Payments [NACHA Payments]

ClairMail enables two-way customer interaction via mobile phones, regardless of the type of phone and the wireless network, using the phones existing software and standard features, including email and SMS messaging, mobile web and native client applications. No new mobile phone software is required.

The big news from ClairMail at the NACHA Payments is that it is partnering with WAUSAU to extend the WAUSAU remittance platform to the mobile channel. ClairMail Mobile Lockbox technology enables an alet message sent to the payer's mobile phone with details such as payee name, dollar amount, and due date. The payer replies to message to instantly pay the bill from their mobile phone. If the biller is fortunate (and the consumer not particularly adept at cash management) the payee may respond immediately to the alert, rather than paying on the due date.

Regardless of the desire or need for consumers to pay their bills from their mobile phone, I do think that mobile alerts for corporate payments make a lot of sense. Because the payment amounts are larger and the stakes of missing a payment are often higher, corporate payments are particularly suited for mobile transactions - they have the added benefit of being discrete, enabling corporate finance managers to quickly and quietly respond to urgent payment matters from meetings, on the road, and off hours. In particular, positive pay confirmations, wire payment confirmations, and lockbox exception handling are well suited to the ClairMail solution.

One particularly cool feature overcomes the awkwardness of entering a URL and username + password combination into a mobile browser. Using the ClairMail solution the customer can send a text message "go" to their financial institution and receive in reply a dynamic link. Upon loading the dynamic URL the mobile user enters an encrypted session and only has to enter a PIN rather than their username/pw pair.

>> Return to index of my posts from NACHA Payments 2008

ChoicePay's New Multichannel Electronic Payment Platform that Extends Remittance Solutions for Small & Mid-sized Billers [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

ChoicePay Offers a Powerful, new Multichannel Electronic Payment Platform that Extends Remittance Solutions for Small & Mid-sized Billers [NACHA Payments]

I am really excited about a new service from ChoicePay that will allow remittance vendors and financial institutions selling to small and mid-sized billers to quickly and easily add electronic payments to their lockbox offering. Elspeth Bloodgood, demo'd for me how ChoicePay has taken its multi-channel payment platform (kiosk, call center, walk-up retail, IVR, and online) and repackaged it for quick deployment via white-label solutions. The biller customer will receive a single stream of payment data (either via their remittance provider, or via ChoicePay) combining all payment channels and supported with Business Objects reporting capability.

The rapid provisioning of this tool blew me away. The solution is not only completely modular, but the onboarding process is a series of workflow-driven screes with validation alerts built in. The biller enters preferences to match its business process and adding a new payment method is remarkably simple. In the background, the parameterized ChoicePay engine drives the necessary web services. The ease of implementation means that small and mid-sized banks can offer a comprehensive payment solution to businesses with as few as 1000 transactions a month. ChoicePay will train the resellers implementation and product teams to deploy and support the solution.

The online interface can be customized to match the branding of the biller (adding a logo, modifying colors, etc. is as easy as formatting this blog - even easier). The solution is multi-lingual and the interface for a one-time payment is the same as for a recurring payment (you simply check a box to make the one-time payment recurring and can elect to turn off paper billing).

It's very cool. I'll be monitoring the uptake of this solution over the coming months and will post follow ups.

>> Return to index of my posts from NACHA Payments 2008

eGistics - Scalable, Flexible Hosted Document Management [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

eGistics - Scalable, Flexible Hosted Document Management [NACHA Payments 2008]

I had an opportunity to speak with Bob Lund, CEO of eGistics, and discuss the company's transition from a payments-centric archive to a more holistic document-centric model, encompassing not just images of check payments but the accompanying remittance and correspondence, as well as other key business documents,  thereby enabling its financial institution and payment processing vendor customers to better serve the needs of billers and retailers.

Through its hosted business model, eGistics provides a scalable, secure, redundant document image archive to support payments applications such as retail and wholesale receivables processing, check processing/Check 21,medical payments processing (EOBs) and records management, and loan processing and management. Because it is a hosted solution, customers do not need to make a capital investment and simply pay a one-time fee to load each image. Subsequent viewing of the images is free, thus customers can predict their archive costs based on transaction volume rather than usage of archived images.

I was particularly impressed with eGistics workflow and business rules capability. Customers can define escalation procedures for the timely review and resolution of exception items. For example, a brokerage that receives a payment a their lockbox with a letter requiring exception handling can provide email addresses for employees that should be alerted with a link to the item for review. And if the initial contact does not respond, a second employee will be contacted. Similarly, if the deadline for resolution of a particular item is approaching, additional employees may be contacted.

eGistics is in partnership with ChoicePay (more on their latest offerings here) and US Dataworks, as well as other payment firms and many of the top financial institutions. The company has already gained traction within the healthcare industry and is well positioned to continue to serve the growing needs of that vertical.

>> Return to index of my posts from NACHA Payments 2008

International Payments - The Changing Landscape [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

International Payments - The Changing Landscape [NACHA Payments]

Ralph Dangelmaier
President, Americas, ACI Worldwide
Debbie Smart CTP
Senior Product Consultant, ACI Worldwide
John A. Jaye
First Vice President, Channel Technology, Bank of America

Synopsis from Conference Program

International trade is growing rapidly as more companies source goods and services overseas. In terms of volume, international payments are estimated to represent approximately 8% of total payments and they will continue global growth at a rate of 10.2% annually. As nations' economies become increasingly interdependent through trade and investment and as funds and people become more mobile globally, the need to move money across borders efficiently, securely, inexpensively and in a timely way intensifies. Using compelling statistics and trends, speakers discuss the five most significant influences of international payments which include: government-led initiatives and mandates like SEPA; the upswing in outsourcing driving operational efficiencies; emerging transnational systems reducing the dependency on corresponding networks for payment; the increase in managing security of risk and liquidity management; and the expansion of multinational banks and corporations. Shifts in payment trends, such as remittance and open account trade payments, are also discussed.

My Observations & Comments

Three trends are driving increasing focus on International payments:

1. Growth
   Primarily around trade but also government transactions. Ten percent/year growth in international trade, 7.8% within the Americas. By one estimate, cross border payments make up 8% of total payments. [The speakers haven't posted their slides to the conference archive so I can't confirm the source of these figures, I will update this if I can get a hold of them and their sources. For now this is what I've got in my handwritten notes.]
2. Government & Regulatory Mandates
   Regulatory mandates and government-led payment efficiency initiatives are driving bank and vendor solutions for International payments. For example, SEPA and PSD in Europe, FasterPay in the UK, Basel II, and the Patriot Act in the USA.
3. Globalization
   Multinational companies pressure their bankers to provide truly global solutions, just as many of the largest banks become global themselves. Operational efficiencies are sought by multinationals and financial institutions alike through outsourcing. And increasingly, large banks are able to clear International payments internally.

Trade Finance as an Opportunity for Financial Institutions

2007 US Trade statistics: Export = 1.132 Trillion vs. Import = 1.953 Trillion. There are 7 states with exports greater than $40 billion. We are experiencing record exports due to the weak dollar.

Traditionally international trade was conducted via Letters of Credit (see diagram here) whereby intermediary financial institutions absorbed the risk of conducting business with far off, unfamiliar trading partners and often provided funding to suppliers. Today, most international trade is conducted on open terms, via purchase orders. Open trade reduces costs and shortens the time frame (assuming payment terms are short). But suppliers/exporters assume the risk and may have a hard time finding funding.

SWIFT's Trade Service Utility was developed to enable banks to "reintermediate themselves" by delivering value-add trade services to support open trade worldwide. [Fifty banks participate worldwide, but the uptake has been relatively slow.]

Remittances as an Opportunity for Financial Institutions

A second, growing opportunity for banks to expand International transactions is Remittance services. Consumers working overseas send money home at ever increasing rates (research by Aite suggests that global remittances will reach $456 Billion by 2010). The top four remittance destinations are China, Mexico, the US, and India.

Non-financial institutions dominate the market (Western Union, MoneyGram, Euronet, and Xoom) but the speakers suggest that banks can compete effectively by offering lower transaction fees, better exchange margins, while expanding their customer base. One suggestion was to target the employees of banks' corporate customers, offering a direct deposit option for payroll that would fund an account (or prepaid debit card) in another country.

Inexplicably the second half of this presentation was devoted to BofA's payments hub strategy. It was interesting, but I won't cover that here, as it does not pertain to International payments.

>> Return to index of my posts from NACHA Payments 2008

Peter E. Raskind, President and CEO of National City [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

This year's keynote presentation was by Peter E. Raskind, President and CEO of National City. The topic was supposedly "Executing Payment Strategies in a Changing Environment" but it sounded a lot like an infomercial for National City. I tuned most of it out, but the Q&A was quite interesting.

Q&A with Peter E. Raskind, National City

There were many questions about subprime housing and the credit crisis and regulatory response. Raskind expressed faith in the free market, and emphasized that the industry "must do the right thing in a timely manner" or regulators will step in.  One questioner cited a recent Economist article advocating a "countercyclical" approach to bank regulation (building reserves during good times in anticipation of the eventual bad times) and Raskind agreed that a more modulated measurement of capital adequacy (a sliding scale based on bank risk profiles) rather than a binary threshold makes sense.

With regard to banking competition (and consolidation, in particular the Chicago market) Raskind stressed that banks must focus on execution in order to earn the right to survive. Raskind acknowledged the "real fear" of  bank disintermediation by PayPal, Google Checkout, telecoms and mobile startups. He characterized the access to payment systems for consumers and businesses as the last great franchise left to the banking industry and an enormously profitable one. He said that the competitive threat is relevant and of enormous concern. Banks must "earn their customers business by providing safe, reliable access to payments at competitive cost."

He endorsed the consolidated payments hub concept, but did not think it would come to fruition in during the course of his career. He believes that mobile payments are a viable substitute for currency, particularly small value transactions, but predicted a more glacial rate of mobile adoption rather than cataclysmic change.

Raskind deferred that representatives from BofA and Wells Fargo would be better positioned to comment on their recently announced plans to consolidate their ACH processing, but did wonder about the two banks' ability to differentiate their brands with their customers.

>> Return to index of my posts from NACHA Payments 2008

Overall Observations & NACHA Leadership Interview [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

Overall Observations &
NACHA Leadership Interview

ACH Transaction Growth: Over All and B2B - More than 18 billion automated clearing house (ACH) payments were made in 2007, a 12.6 percent increase over 2006. Business payments increased to 2.5 billion, up 8.5 percent over 2006. Financial EDI records (remittance data passed through the ACH network) increased by 11.9 percent and the number of Financial EDI payments increased 18.1 percent over 2006. That means that a whole lot B2B payments were made via ACH but the remittance information traveled from buyer to seller via other means (mail, email, fax, phone, etc.).  Details here.

Leadership Transition at NACHA - At the end of the year, Elliott McEntee will step down after 18 years as CEO of NACHA. He has led the ACH organization through unprecedented growth as the payments industry transitions from paper to electronic. Many innovative, non-bank payments solutions leverage the ubiquity of the ACH network in ways unimaginable eighteen years ago. McEntee's successor, Janet Estep, formerly an Executive with US Bancorp, is charged with defining a vision for NACHA's future. A future that, according to NACHA's Board Chairman Steve Ellis, will not only continue to focus on the migration of paper payments to electronic, but also, increasingly focus on mobile and global payments.

I had an opportunity to talk to McEntee, Estep, and Ellis on Tuesday afternoon. After only one week on the job, it is too soon for Estep to outline her plans (I'll check in with her in a few months), but my first impression is positive. She emphasized the need to collaborate with all of NACHA's constituencies - member banks, technology partners, consumers and businesses - in order to ensure the ACH network provides reliable, secure payments that meet the needs of both senders and receivers in a number of contexts. And she vowed to rid future conferences of showgirls and Cher impersonators.

When asked about the tension between NACHA's role in defining standards and rules and its efforts to develop products, Estep made a distinction between traditional product management (from concept to development, including pricing and going to market) and what she would term "initiatives" at NACHA, which does not imply full ownership or include pricing and go-to market execution. Her view is that NACHA has a unique role in collaborating with its constituencies to enable new payments initiatives. Ellis also views NACHA's efforts as distinct from products, seeing the organization as an enabler of new products, leveraging the rails that already exist to do more and more. He characterized the NACHA efforts (EBIDS, Secure Vault Payments) as proof of concepts/pilots - not unlike a laboratory.

Increased Focus on B2B - I was particularly pleased that Ellis, Estep, and McEntee all stressed the importance of B2B payments to NACHA's future strategy. NACHA is increasing its focus on B2B, not only conducting research to determine small business payment needs, but also launching a number of its own payments initiatives focused on B2B, e.g. the proposed BIZ transaction that enables invoice flipping. I will be attending the NACHA Councils "MEGA Meeting" in June to learn more about the organizations B2B efforts.

Meanwhile, in the exhibit hall mobile and remote deposit capture had the most buzz. I had a number of interesting one-on-one conversations with  representatives from eGistics, ChoicePay, ClairMail, OB10, Wausau, NetDeposit, and GoldLeaf. And of course, the recent announcement of Wells Fargo & BofA's plans to merge their ACH operations was the subject of much discussion.

>> Return to index of my posts from NACHA Payments 2008

NACHA Payments 2008 - Forte Blog Index

I took a slight detour en route home from Las Vegas (via Death Valley and Yosemite - spectacular!) and just finished writing up my observations.

This year is the largest NACHA Payments conference to date (they get bigger and bigger each year) with nearly three thousand attendees. There were sessions devoted to ACH, check electronification, card solutions, global payments, corporate payment solutions and the payments industry over all. Over the course of the conference I attended eight sessions and had one-on-one conversations with seven vendors. I also participated in a press conference with the NACHA Leadership.

General Sessions & Overall Observations

Summary & NACHA Leadership Interview

Keynote/Peter Raskind, National City (general session)

Break Out Sessions

International Payments
ACI Worldwide & BofA

Global Remote Deposit Capture
Goldleaf Financial and Global Concepts/McKinsey

Corporate Mobile Banking
Celent & Wells Fargo

XML All Stars
BofA, JPMorgan Chase, GE Corporate Treasury, Upper Midwest ACH Association, ABN AMRO Bank

B2B Outlook
Federal Reserve, AFP, Cal State AAA, Costco

Remittance for Wires
Federal Reserve, CHIPS, SWIFT

NACHA's B2B Strategy
NACHA, Celent

How To Turn Your Online Bill Pay Expense into a Revenue Stream
eCom Advisors

Vendors

Bob Lund/eGistics

Elspeth Bloodgood/ChoicePay

Joe Salesky/ClairMail

Rob Peyton/OB10

Kathy Strasser/Wausau

Danne Buchanan/NetDeposit

David Peterson/Goldleaf

NACHA Payments 2008

Whoa, it's hot in Las Vegas - 106 degrees to be exact - but thankfully the MGM Conference center was comfortable today. I'm here for NACHA's Payments 2008 Conference, checking out the corporate payments sessions, interviewing industry leaders, and seeing demos of the latest offerings from vendors. I'll blog in more detail when it's all done (too hectic to attempt to live blog) so check back in a day or so.

In the meantime, I have to run because I'm going meet up with one of my conference buddies and see the 10:00 PM show of Cirque du Soleil's LOVE featuring the music of the Beatles. (When in Vegas...)

[UPDATE - The Cirque de Soleil show was outstanding. Highly recommended.]

Is Your Money Market Fund Safe? Examining The Crisis in Cash

Last night the San Francisco Treasury Management Association (TMA), the Silicon Valley TMA, and the Peninsula TMA (all local affiliates of the Association for Financial Professionals, or AFP) hosted Peter Crane, of Crane Data at our annual dinner meeting.

Over steak frites at Left Bank in San Mateo a packed house listened intently as Crane evaluated the safety of money market mutual funds and reviewed the most recent crisis in the money markets. He addressed various money market securities, including asset-backed commercial paper and CP, with a focus on what has gone wrong and what could go wrong.

"Mr. Crane thinks investors have lost far more money by flocking to Treasury money funds, due to their lower yields, than they would have from the threat of exposure to problem securities...sacrificing two percentage points in yield to avoid the remote chance that you may lose 1% to 2% in principal… it's silly." – Financial Week

Learn more:

• Crane Data
• Crane Data's Money Fund Blog

Live Blogging from Finnovate - Best of Show

I am live blogging from Finnovate Startup in San Francisco. Jim Bruene and his team at NetBanker gathered 40 startups, rebrandings, and company debuts in online banking and finance. Each participant had a brief 5 minutes to demo their product.

We're back from the networking and eagerly anticipating the best of show announcement (based on audience votes)...

BEST OF SHOW

• 3rd Place (tie) - Zecco and First ROI/BancVue 
• 2nd Place - Jwaala 
• 1st Place - Zopa

More coverage here:

• Intro
• Morning Session 
• Afternoon Session 
• Observations & Trends [coming soon]