Wells Fargo & Co. is investing in a major upgrade of its online applications for corporate banking customers in an effort to make the Web-based services easier to use. Analysts said the project is part of a trend that’s helping to push IT spending upward in the entire wholesale banking industry.
Steve Ellis, executive vice-president of Wells Fargo’s wholesale services group, this week said the upgrade of the 4-year-old Commercial Electronic Office (CEO) online service began on a pilot basis in December and will start to go live over the next several months. But he added that the upgrade is expected to take up to two years to complete.
Wells Fargo is using BEA Systems Inc.’s WebLogic at the presentation level to port back-end applications to the home page for presentation to business customers.
Currently Wells Fargo is rolling out an internal version of CEO for its employees, to give them a more consolidated view of customer data.
CEO is used by about 140,000 end users at Wells Fargo’s corporate clients to view account information and bank statements and to access money-transfer services and an automated clearinghouse that processes about US$6 trillion in electronic payments annually.
Wells Fargo is upgrading CEO and installing WebLogic to tie together disparate applications and create integrated business processes and data workflows. “We are an information-rich company, but there’s so much information that it’s sometimes hard to find what you need,” Ellis said. “So we’re grabbing it and pushing it upfront to the person who needs it, so they can do their job faster.”
For example, BEA’s software will enable users to access business systems directly from the CEO home page. Users will also be able to tailor the online service to fit their business needs, and Ellis said the new system will include built-in workflow applications and IT security features such as end-user authentication.
Ellis wouldn’t disclose the total cost of the upgrade, but he said that putting the budget “in the millions would be low. It was a big project.” He added that San Francisco-based Wells Fargo got a return on its investment within a year of completing the original CEO rollout and expects no less than that from the ongoing upgrade.
The wholesale banking industry has traditionally lagged far behind retail banks in deploying Web-based applications and other leading-edge technologies, according to Lee Kidder, an analyst at TowerGroup in Needham, Mass.
Wholesale banking has become an increasingly volatile business because of a 15 per cent drop in demand for commercial loans over the past three years, TowerGroup said in a report released last November. It also reported that once-loyal corporate customers now shop around for the best financing deals and are demanding better service and Internet-based technology from banks.
But TowerGroup predicted in the report that after years of IT spending stagnation, U.S. wholesale banks will increase their overall technology investments by six per cent this year compared with 2003.
Kidder said four issues are driving the expected increase: cost-cutting through more business automation, compliance with new risk management and corporate governance regulations, the need to find additional revenue sources, and a push to better integrate back-office systems.
“You can’t do effective cost-cutting or effective customer relationship management or risk management unless you have a systems landscape that is well integrated,” Kidder said.