Deutsche Bank has a bill presentment product that is geared specifically for commercial transactions. But it doesn’t want to just sell to corporations, it wants to do it for entire industries, one at a time, beginning with Singapore’s air-cargo industry. Jimmy Yap, Deutsche Bank’s Asia Pacific head explains.
The pilot project for the air-cargo industry began shortly after the bank rolled out its EBPP product, db-eBills, in July last year. The implementation was to cut the processing time of air-cargo bills from the 2 weeks that it took to 2-3 days.
The role of a bank, according to Jimmy Yap, Deutsche Bank’s Asia Pacific head, has always been to provide a secured environment for financial transactions to take place. That role is not going to change, said Yap, even as the Internet changes the face of how business transactions are conducted all over the world.
“We have conducted round table discussions where we asked our customers about the role of banks in the new economy,” explained Yap. “The answer always comes back to the same thing - they want banks to provide trust.”
Providing a billing framework to an entire industry, however, is something entirely new to Deutsche Bank. To use Yap’s own words, it is “a step in a direction” that the bank has never taken before as the real value of bill presentment is not in the payment itself but in the reconciliation process that takes place after the settlement. Payment and billing information must be sent to both payer and payee and adjusted against account information to reflect payment status.
“If you look at the value chain of our customers, with all the different steps that they take; the invoicing part, which our corporate customers generally do, we are now doing for them,” said Yap.
Singapore’s air-cargo industry handles about 1.5 million transactions each month, with turnovers standing at approximately US$600 million each year. That’s a lot of bills to settle and payment information to reconcile.
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Deutsche Bank began by implementing a PKI infrastructure for the industry. Smart cards and smart card readers were issued to participants of the projects. Software was handed out and training was conducted. To date, the project has enrolled 15 airlines and about 250 air-cargo agents and the bank is on its way to bringing the whole industry onboard.
Crucial to Deutsche Bank’s success has been its partnership with Cargo Community Network (CCN). CCN controls the electronic reservation system of the industry and plays a pivotal role in bringing db-eBills to the community. With the e-payment system, CCN aggregates the billing and payment information from airlines and air cargo agents and sends them to Deutsche Bank where bill presentation is generated.
“When you go to a shipping company, you see this guy sitting down talking on the phone,” said Yap, “he is either taking orders or they’re chasing customers for payment. The idea is to eliminate as much of this as possible.”
The hardest part about the whole venture, however, had been to sell to the industry. Deutsche Bank has been able to do this, according to Yap, because of its partnership with CCN and because it has been careful about the level of technology that the industry is prepared to accept. More importantly, however, is the value that Deutsche’s db-eBills add to the industry’s processes. It is a proposition that no industry receptive to change would be prepared back away from.
“It’s not the technology,” said Yap, “it’s the proposition that accompanies the technology that is going to make or break this project. If you don’t have a compelling proposition, nobody is going to buy your idea. Simple as that.”
For future plans, Deutsche bank can either grow the system side-ways by incorporating related industries or to export the solution entirely to another vertical. Yap is not limiting the solution only to industry wide implementations. Negotiations are already underway to deploy the solution for corporations in Philippines, Japan and Hong Kong. Yap also believes the solution has a role to play in providing payment resolution for B2B marketplaces.