Reprint of an article in the Fall 2003 issue of Windows in Financial Services

Bank of Tokyo-Mitsubishi: Ease of Use [Finally] for Commercial Paper

The Bank of Tokyo-Mitsubishi’s corporate customers were getting restless. The bank’s commercial paper system, in use since 1987 and based on the DOS operating system, was inadequate for today’s needs.

“Our commercial paper application was tedious and not very user-friendly,” recalled Maria Cadorniga, assistant vice president at the bank’s offices in Jersey City. “We decided to move to a Windows-based system with an attractive graphical user interface that our clients could access over the Internet.”

The bank chose an application from Open Information Systems, a Connecticut-based firm that has developed solutions for commercial paper, trust, global custody and cash management running on a Microsoft platform. Started in 1994 by Tom McMackin and Tom Groshans, both Citibank veterans, OIS flipped the traditional structure of corporate banking on its head to focus on the presentation of information to the customer’s desktop. Banks, they knew, needed to reshape the way they delivered information from their back-office mainframe systems to users, who use the information to help make decisions. In order to act quickly, users need clear, concise presentation of global data, sometimes from disparate systems.

“We started with a front-end application that was Windows-based, a fat client for custody and cash management,” said McMackin. In 1999, for Citibank London, OIS developed a Web-based application for commercial paper, medium-term notes and bonds. The application won an award from Institutional Investor magazine for “the Best Use of the Internet for Operations.” OIS can gather data from separate legacy systems, such as commercial paper and cash management, and then present users with a snapshot of their current overall cash position, so they can see immediately if they have a daylight overdraft or excess funds to invest.

At the Bank of Tokyo, moving to the OIS Internet-based system has meant improved performance and sharply increased convenience for users in both the U.S. and Japan. “The thing we like the most about the application is its interface with the Depository Trust’s PIMS (Pre-Issuance Messaging System),” said Cadorniga. “Our clients can have one of their broker-dealers, like Lehman or Goldman Sachs, enter their trade details through DTCC PIMS and then through STAR we can see those batch transactions and act on them.” The bank has about 30 corporate customers using the system, which was installed about a year ago.

“The new system has improved performance dramatically,” she added. “Pages download much faster.” Through Internet access, controlled by user name, password and a security token from Secure ID, executives in Japan can check transactions of American operations during the Japanese workday. The OIS commercial paper application has worked so well for the Bank of Tokyo that the bank has put its custody, cash management, and securities lending applications on the OIS system over the past year.

“Customers like this because they can get to their information faster, and it reduces manual processing and phone calls,” she said. “When they sign on they see an integrated real-time picture of their total relationship with the Bank of Tokyo. We have developed trade-entry functionality, so customers can send their securities transaction instruction by STAR and most will go straight into our back office. It has definitely helped in maintaining our current customer base because there is a lot of competition in Web-based applications; the system is definitely part of our marketing.”

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