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SibosEye-Opener: Why Can't a Payment be More Like a FedEx?

Sibos was once again a hectic, frenetic week of meetings and eye-opening conversations. Fundtech was fortunate to announce BofA as its first customer for its new SOA payments platform. The explanation by Cindy Murray – EVP of Innovation at BofA of how they plan to use this new technology was worth repeating.


As Cindy explained it: When you send a FedEx package for $25, you know exactly where it is throughout its journey, and when it arrives at its destination. You’re able to set up email alerts – you’re even able to see the recipient’s signature on your computer screen. So why is it, she asks, that when you send a $50 million payment you can’t get the same level of service?


Good question! And this is exactly what BofA plans to do – change the game in payments using new SOA payments hub technology. Here’s the big idea: Just like FedEx pulls back-office data forward to add value to the end-user experience, so too will BofA. Payment hubs are able to take important data related to method of payment, pricing and delivery and bring it into the end-user experience. So just like FedEx, bank customers will be able to know the status of their payment and all sorts of other details.


What’s really going on? The key trend in the payments business is to add value to the transaction by using the associated data. The battle for lowest cost through automation is no long the primary objective. The top dog in payments is enriched user experience through access to back-office data. Payments are not commoditized – they are the new competitive edge!


Comments: (4)

A Finextra member
A Finextra member 25 September, 2009, 11:31Be the first to give this comment the thumbs up 0 likes

I do wonder whether there won't be the same competitive pressures that Fedex faces - speed.

Speed can alter risk  - lower risk too, if the the right methods are in place.

I do wonder whether the analogy doesn't imply payments are taking so long to 'arrive' that they need to be tracked.

I do think a more interactive and instant approach might be something to look out for.

I would like to congratulate BofA on getting Sallie Krawchek onto the team.  I had her at the top of my list. And congratulations Sallie but I can't say I'm surprised one little bit.

A Finextra member
A Finextra member 28 September, 2009, 12:02Be the first to give this comment the thumbs up 0 likes


Thats an interesting analogy and one I've heard before. There's a fundamental difference with a payment at Bank of America and the Fedex parcel -  the parcel never leaves Fedex's control therefore it's very easy to see where the parcel is.

The Bank of America solution gives a snapshot of the payment whilst in Bof A's system, it doesn't, and can't, give a picture of a payment outside its control.

(PS My companies system does give timelines and status even though the payment is in a counterparty system).




Andreas Unterste
Andreas Unterste - / - Michigan 01 October, 2009, 16:16Be the first to give this comment the thumbs up 0 likes

the really sad thing is, Heidi Miller of JPMorgan Chase used that exact analogy already in her opening remarks of Sibos 2004 (!) and substantially nothing has changed at all since then. Especially cross border payments are still a black box for beneficiary and ordering customer. A single institution solution will not change the game.....

Stanley Epstein
Stanley Epstein - Citadel Advantage Group - Modiin 06 October, 2009, 12:08Be the first to give this comment the thumbs up 0 likes

I am not sure if I understand what the benefit of tracking a payment could be. Generally a payment should be completed within two days of its origination. I still have a problem with this two day gap, but that is another story. I certainly can see the benefit to the bank offering this as a value added service, but to the user? Sorry, I just can’t see it.

George Ravich

George Ravich


Ravco Marketing, LLC

Member since

20 Jan 2008



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