The latest project was under way by October, although
the contract had lagged somewhat behind the start date and was only signed the previous month. The original discussions started a couple of years earlier, said Davies. The requirement in New Zealand stemmed from a central
bank-driven project to implement a new settlement system, Settlement Before Interchange (SBI), due to go live by late 2011. It brought intra-day settlement so that no balances are left at the end of the day, waiting for the RTGS to open. Swift was working on the project. Banks in New Zealand needed to change their formats and ANZ decided to look at its overall low-value payments infrastructure.
At ANZ, the planning for Asia was under way, with the
bank’s operations having been extended through its purchase of RBS’s operations in the region. One decision was whether to run these from a New Zealand hub. No one from ANZ was available to comment. A second deal duly occurred, from Westpac in New
Zealand, again for LAPS High Volume linked to the new settlement system. It signed in February 2011. Davies said, ‘Westpac had the same issues [as ANZ] about changing the way it approaches its low-value processing’. The move to intra- day settlement saw Westpac engage with Logica and other suppliers in the middle of the previous year. By this stage, Logica was already in discussions with ANZ about the formats and rules for the new settlement system. Davies described the resultant solution as ‘pretty much out-of-the-box’. By May 2011, ANZ had commenced bi-lateral testing and
was on track, said Davies. Westpac had received delivery of the system and had started acceptance testing. Unlike ANZ, Westpac’s focus was purely on meeting the New Zealand changes, at least for the time being. As with ANZ, the bank had been seeking to implement Global PayPlus for high-value payments. Westpac also has the complication of the merger with St George Bank, which was coincidentally implementing Clear2Pay’s platform as a payments hub at the time of the deal. By this stage, the situation in Australia had become clearer.
There was now the Low-Value Settlement Service (LVSS) initiative, scheduled for implementation by the end of 2011 for the transmission of test messages, with full cut-over to follow in 2012. As in New Zealand, Swift was involved in the project. Logica was hopeful that this would also bring deals for LAPS, but this project was some way behind that of New Zealand. ‘I have the sense that banks in Australia are just now thinking about what to do and it is in the early stages,’ said Davies, in May 2011. The aforementioned pioneer with LAPS in the Caribbean/
Central America, Banco Popular de Puerto Rico (BPPR), conducted a full selection before it opted for LAPS to replace Bess, said Logica’s market development director for global products business at the time at the time, Tim Brew. This was typically the case as Bess users looked at their options, he said. Prior to the selection, Logica had carried out a consulting assignment with the bank to evaluate the business case for replacement versus retaining Bess. The latter had been in place for over 20 years. Logica was keen on this sort of consulting led assignment in the payments space. Logica was aware of three or four other solutions that
were evaluated by the bank. The scope of the roll-out was for BPPR’s central payment processing for US Federal Reserve and Swift-based payments, as well as AML detection and financial messaging. One requirement was scalability, in part stemming from BPPR’s recent growth, including the takeover of the deposits of failed Westernbank Puerto Rico during 2010. BPPR had been undergoing a transformation of a number of its core systems and the Bess replacement was part of this, said Logica’s payments practice director, John Farrell. Other ventures included the implementation of the Banktrade trade finance system from CSI (a 2006 deal) and FIS’s Systematics core solution for the US operations (a 2010 deal). The cut-over of LAPS was scheduled for November 2012. LAPS would be based at the data centre of the bank’s local IT implementation partner, Evertec, in Cupey, Puerto Rico, and at a disaster recovery site on the US mainland.
In 2012, LAPS gained a first south-east Asian recruit in the form of Thailand’s oldest bank, Siam Commercial Bank (SCB). Forming part of a large-scale modernisation programme at the bank, LAPS was selected to replace ACI Worldwide’s Cash Navigator and to underpin a new centralised hub for mass payments. SCB went through an RFI and RFP process which featured the standard international players in this space, such as Clear2Pay and Fundtech, and it also considered the incumbent provider, ACI. The bank had actually met Logica at the Sibos conference four years earlier and later invited it to participate in the selection.
SCB was looking for a supplier that had a proven track
record in the low-value, mass payments space and was flexible, said Davies. It needed to be able to adapt its products rapidly to carry out transactions such as time payments (the bank competes in the payroll space). ‘When workers in Thailand finish their shift, the first thing they do is go to an ATM to make sure they’ve been paid, which means the money has to be there earlier in the day.’ Another key criteria was the quick deployment of the new hub, as the legacy system ‘is a burning
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