Nick HuberA UK clearing company promises to slash charges for member banks
by overhauling its IT systems.
In an ambitious IT shake-up to revamp its sterling and euro
settlement services, Clearing House Automated Payment System
(Chaps) is replacing its proprietary payments network and enquiry
link infrastructure in a wide-ranging contract with Swift, the
financial communications infrastructure provider.
Fees to use the Chaps clearing services are expected to fall
from about £900,000 to £100,000 for both sterling and euro.
Users of the service - such as Barclays and HSBC - are also set
to save hundreds of thousands of pounds by not having to buy extra
hardware and software bundled with the Chaps service.
The new service for sterling and euro clearing, New Chaps, will
be up and running by the third quarter of next year, according to
Chaps.
The first part of the project will see the clearing giant scrap
its proprietary network from BT, a closed user group, and migrate
to the Swift Fin network, which will handle payment messaging
applications.
Under the second part of the overhaul, Chaps is also scrapping a
member's enquiry link from BT.
The current enquiry link allows members to track payments in
real time, which are settled by the Bank of England. But first
users have to buy proprietary Tandem hardware and Logica software
to use the current service.
The new replacement Swift product, Swift Alliance Webstation, is
a Java-based system that allows its users to view real-time
financial information through an Internet browser.
David Mcfarlene, deputy company manager for Chaps, said, "IT is
a key way of cutting costs, especially with generic solutions.
Companies no longer have to invest in mandatory hardware and
software."
Those companies that use Swift Alliance Webstation could also
cut PC costs by using one PC to access a handful of different
payment infrastructures, which are planning to use the Swift
network, added Mcfarlene.
The Chaps settlement services are being developed by Chaps and
the Bank of England. A testing programme has also been agreed by
Chaps' 21 members.
Swift will be responsible for managing encryption, as well as
installing and maintaining the network.