Banking by remote control

Two Fridays ago, Security Bank Corp. celebrated the first anniversary of Digibanker. The internet-based service for the chief financial officers of the country’s top 1,500 generated a third more than its P600 million business target for 2001.

This year, the volume of business from Digibanker is expected to hit P2 billion.

"We’re not the first to offer the service. Most foreign banks and a couple of local banks have paved the way," said first vice-president for corporate banking Emmanuel Narciso. "One advantage of coming in later is we’ve learned from the experiences and mistakes of those before us. This is a huge investment for any bank and it’s hard to overhaul the system mid-stream."

From day one, Digibanker has been 100% internet-based, allowing corporations to conduct real time cash management transactions through SBC’s 150 branches nationwide. "Our typical client is the large corporation with nationwide sales and lots of disbursements," he said. These include the two biggest life insurance companies operating in the country as well as large-scale manufacturers of consumer goods.

Passing on the work

In a manufacturing company, cash management is basically monitoring daily sales or how much operating money comes in, on the one hand, and coming up with a payment schedule for operating expenses such as the salaries of employees and utility bills as well as credit extended by suppliers, on the other hand.

"Cash management is the most detailed and least productive function of a chief financial manager or finance manager but it takes most of his time. He is tied down to the office because he has to sign the payroll schedule and the many checks payable to the company’s creditors," said senior assistant vice-president for business development Numeriano Amparo.

Passing off the cash management function to a bank like SBC allows the CFO to do higher value functions such as raising funds for the company and vertically extends his office to his home, his car and the restaurant he is dining in. "The CFO doesn’t compromise any of the important transactions of his company. In fact, he enhances it by letting the bank handle it," said Narciso.

For example, a company enrolled in the payroll service offered by a regular bank would have to physically deliver the diskette containing the payroll schedule to the nearest bank branch. Along the way, the diskette could get lost or could be tampered with. By using Digibanker, the payroll schedule is sent by the CFO to SBC. Once it is received, security walls are put in place and the bank will automatically disburse the payroll to the individual ATM accounts of the company’s employees.

A more complicated example is check disbursements, which require as many as 35 either/or corporate signatories to authorize and verify the release of different kinds of checks.

Many of these regular disbursements are made to utility companies or to the landlord of the leased office space. These disbursements can be outsourced to Digibanker, which then comes up with a customized system that encodes all the company’s authorized signatories and their parameters of their authority. (Although more common among family-owned company, some multinational companies also have a super signatory or one person whose signature is enough to release the check).

User-friendly

"There are, of course conventions but Digibanker is very intuitive in terms of navigation. It’s user-friendly," said Narcisco.

Although the system walks the user through the process in a matter-of-fact (instead of patronizing manner), it has a back-up team to help CFOs in a bind. The team is made up of three people, whose cell phones are open to calls 24 hours a day, seven days a week. "Most of the calls we get concern an error message. There was one client who couldn’t access his real estate and acquired assets anywhere in his website. It turned out he clicked on to SBC’s website instead of that of his company," said Amparo.

The error message is part of Digibanker’s security wall. To access the company’s website, the authorized person must first insert an ATM-like card called Secure T-card and then punch in his personal identification number of PIN. Then, there’s the 128-bit encryption.

Within the company, certain information will flash on the screen only when a specific user’s number or digital certificate of authority is punched in. There’s also an audit trail, which discourages fraud from the inside. Based on surveys, 80% of corporate fraud is committed from the inside or by an employee.

In the past year, SBC has focused on selling Digibanker to existing bank clients. This year, it intends to go outside. "We have a product that we’re very proud of. More important, it’s a product that our corporate clients will find very useful," said Narciso.