Westpac is to roll out a payment instructions system that integrates with SAP software for its corporate customers in the first quarter of 2013.
According to the bank's head of innovation and implementation Mike Baldwin, Westpac is the first of the big four Australian banks to offer corporate customers the ability to send a payment instruction directly from their SAP system to Westpac’s core payment systems and receive a confirmation message back from the bank in real time.
Two global banks, Citibank and Standard Chartered Bank, have already rolled out the SAP payment system. Baldwin said that Westpac used these examples as references during the project.
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Speaking to CIO Australia, Baldwin said there had been a driver in the marketplace to improve productivity and security with real-time payments. For example, the payment system will offer customers increased encryption and ISO 20022 global data standards.
According to Baldwin, the Westpac division chose SAP to provide the service because it is the largest enterprise resource planner (ERP) provider in Australia. Approximately 70 per cent of the top 200 corporations in Australia use SAP’s ERP software offerings.
“About a third of our customers use SAP and it’s hard to say whether everyone will take up the [SAP payments] service in the first year but we are confident the majority will,” he said.
“We have common objectives — this is about solving our customer’s challenges and problems by providing a value add service to them,” Baldwin said.
Once Westpac goes live with the service early next year, customers can download Westpac software from the SAP service portal and set up the system at “a minimal cost”.
In response, a Commonwealth Bank Australia (CBA) spokeswoman said that while it did not comment directly on competitors, CBA already offers “true real-time banking” for all corporate and institutional customers in addition to retail customers.
“This means that when we receive the payments message, we actually process it in real time,” she said in a statement.
According to the spokesperson, the bank’s Commbiz and NetBank platforms offer real-time banking for any payment received from any CBA customer — it is not only available for one particular platform such as SAP.
“We also offer fully automated reporting which provides clients with the fate of individual payments for automated or individual follow up,” she said.
A National Australia Bank (NAB) spokesman said that the bank offers corporate customers a number of options to process and receive information about payments in real time, including a gross settlements system.
"Due to the inter-connectivity of Australian institutions and rapid shifts in how people want to interact with their bank, we're focussed on the long-term goal of a real-time payments system that benefits all customers,” he said.
The spokesman added that NAB's multi-year transformation agenda would enable customers to realise the benefits from the “eventual changes” to Australia's payments infrastructure.
ANZ Bank has also been contacted for a response by CIO Australia
Follow Hamish Barwick on Twitter: @HamishBarwick