Bank launches system for business market

5 April 2000
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06 April 2000 | Liam O'Brien

Barclays Bank is launching an end-to-end service in a attempt to secure a dominant share of the business-to-business e-commerce market.

The bank claims that its new service is the first that provides customers with a service of this kind by bringing banking expertise to bear on the fledgling market. To be launched tomorrow, the package is aimed at businesses with a turnover of between £5 million and £250 million - a quarter of Barclays' customers.

In addition to its procurement functions, the service, supported by IT firm Oracle and Andersen Consulting, will offer settlement and accounting, risk management and working capital facilities.

Customers are expected to be charged a fee of between 10 per cent and 15 per cent of the savings that the service generates for them.

Jenny Samways, Barclays' operations implementation manager, said: "We feel that our ability to offer a complete procurement-to-payment package marks us out from our competitors. It is not so straightforward for IT-specific providers to offer customers this sort of system."

Barclays' initiative - the first to come from a high-street bank - is seen by analysts as long overdue, as e-commerce was threatening to allow business to bypass the traditional banks entirely.

Peter Loughlin, a principal consultant at KPMG, said: "Business-to-business e-commerce threatens all the high-street banks' market positions because, if everything is automated, they will not have a role to play. They needed this to retain their position in the market."

Of the other main banking organisations in the UK, NatWest provides an extranet e-commerce service, NatWest Business Online, which will be Internet-enabled later this year.

Royal Bank of Scotland will make its Internet debut later this month with its Trustmarque e-commerce identity, while Lloyds TSB promises to set up an e-commerce package with most of the services that Barclays' offers by the end of this year.

Many analysts viewed as a persuasive e-commerce offer, but wondered if its cross-industry, horizontal pitch will attract a large enough customer base.

Conrad Nowikow, director of e-procurement at consultancy PricewaterhouseCoopers, said: "Barclays will be able to clarify any uncertainty over the payment process and, certainly, for small and medium-sized enterprises (SMEs) it will be seen as a very attractive offer.

"But it is still hard to launch such an offer because there is the danger that it is too diluted. The question is whether Barclays can achieve critical mass in a number of vertical markets," he added.

News of the launch coincided with the announcement that Barclays was linking up with Internet service provider Freeserve to set up a portal for UK SMEs next month.


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