While Citigroup and Bank of America's sweeping new cash management products may be primarily aimed at busting open new doors to usability and customer interaction, together signal the mainstream arrival of service oriented architecture - and its potential to overcome the limitations of legacy systems. "This is a way to enable the bank to offer a better customer experience on the front end by having better piping on the back end," says Jacob Jegher, a senior analyst at Celent, who says the banks' new projects were a sign that institutions are seeing wider benefits in SOA and are beginning to embrace the user-friendly capabilities of Web 2.0 applications. Citi and BofA's respective plays are among the biggest projects to date to take advantage of SOA. Citi's CitiDirect BE (for "banking evolution") cash management platform includes user-generated content and a video channel. BofA is developing a payments hub that it expects to handle transactions for a wide range of cash management customers, domestic and international, from small and midsize businesses to large corporate and trust clients. By tackling the "quagmire of legacy systems," the new technologies open the way for bankers to be a financial information resource for their clients rather than simply the executor of transactions, Jegher says. Gary E. Greenwald, the global head of capabilities and information products in Citi's global transaction services unit, says CitiDirect BE delivers capabilities beyond transactions and financial reporting. "We've used a modular design to create a flexible portal," he says. The portal is available now to more than 300,000 users worldwide, mostly multinational corporations, along with government agencies and small and midsize businesses in some markets. Citi worked with Microsoft to put an SOA layer on top of the CitiDirect platform that it introduced in 1999, Greenwald says. "Working with Microsoft, we figured out a way to make some of the legacy CitiDirect functionality available in a way that can coexist within the portal." Bindia Hallauer, the CTO in Microsoft's worldwide financial services unit, says that as with many of its cash management services, Citi plans to white-label the technology to regional correspondent banks for their corporate clients. BofA's Milton Santiago, svp of portal strategy and the treasury e-commerce solutions executive in the BofA Merrill Lynch global treasury and wealth management unit, says the sprawling financial services company expects to use the payments hub to streamline its internal systems. "We are one organization, and we will have one payment-processing platform," Santiago says. "We can consolidate multiple platforms that we operate from," he says, including those of Merrill Lynch, which BofA bought on Jan. 1. The hub is designed to support consistent processing for all payments regardless of channel, including payments initiated online or by telephone, Santiago says. "The hub will be the router between all those channels." George Ravich, an evp and CMO Fundtech, says the hub will be able to provide more detailed reports of transaction details to BofA clients. This article can also be found at AmericanBanker.com.

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