Bank of the Bahamas International yesterday said its introduction of a service that will reduce the time for clearing US$ cheques to three from 40 days would improve cash flow for Bahamian businesses and enhance their operating efficiency.
Paul McWeeney, the bank’s managing director, told The Tribune that the new service – slated to reduce the time to clear US$ cheques made out to Bahamian businesses and individuals by up to 700 per cent – was a “natural progression” of the institution’s existing cheque imaging programme.
That initiative allows Bank of the Bahamas International clients to view electronic images of their cheques online. Under the US$ cheque initiative, once received, the bank will scan these cheques to create images of them electronically. The images, which serve as a substitute cheque but maintain the same legal integrity as their paper equivalent, will then be sent electronically by Bank of the Bahamas International to their US correspondent bank, Bank of America.
The US bank then places the cheque images into the US clearing system for payment, eliminating a costly, bureaucratic process that required the physical cheque to be sent from the Bahamas to the US for settlement – a process that could take up to 40 days.
Apart from the US$ cheque imaging, Mr McWeeney yesterday told The Tribune that Bank of the Bahamas International was currently converting its technology platform to a new “core banking solution”
supplied by an Indian company.
“We are in the midst of that conversion right now, and it will enhance the way we conduct business internally as well as externally,” Mr Me Weeney said.
He added that the conversion was expected to be completed by the end of this year, and it would provide the platform for Bank of the Bahamas International to launch new products.
Tanya Wright, Bank of the Bahamas International’s senior manager for business development and public relations, said the bank’s business clients had indicated they were “very pleased” with the US$ cheque clearing system.
As the Bahamas became increasingly integrated with the global economy, and Bahamian companies raised the volume of business they did with US firms and others internationally, the ability to reduce the time to settle US$ transactions will be key for business efficiency and the economy’s competitiveness.
Mrs Wright said: “This technology has the ability to significantly reduce the time they have to wait for access to their funds.” She added that Bahamas-based companies; particularly those in the financial services industry and professional services, such as accountants and lawyers, received payment in US$ and other currencies because they were involved in international business.
Mrs Wright said these businesses would be “thrilled at the opportunity of having more ready access to their cash, improving the efficiency of running and operating their businesses”.
She added: “Time is money. We are in the business of saving them [customers] time and saving them money.”
Director
Vaughn Delaney, Bank of the Bahamas International’s deputy managing director for information technology and human resources, said the bank’s previous investments in IT had borne fruit, with the institution being the first to introduce cheque imaging in the Caribbean.
He said: “We are able to electronically settle US dollar cheques in a short period of time.
“This bank will allow our customers to receive the value of their US deposit items in a very short period of time.”
Mr McWeeney said the US$ cheque imaging and clearance service would “enhance the ability of Bahamians and businesspersons to more efficiently conduct their business enterprises”, enabling’ them to receive instant value for transac tions conducted with cheques.
The Bank of the Bahamas International managing director said the service, fully launched yesterday, would ‘level the playing field’ between the clearance of US$ and Bahamian$ cheques.
From a business perspective, Mr McWeeney said the key was that entrepreneurs got access to their due funds instantly, bolstering cash flow and enabling them to better plan as a result of a three- day settlement period.
In addition, businesses would no longer have to wait for 30 to 40 days to learn with a US$ cheque had been returned or bounced, with that time now reduced to three to four days.
A change in US law, created by the September 11 terror attacks, had aided Bank of the Bahamas International in its initiative. Those attacks had disrupted the US payments and settlement system, so Cheque 21 was introduced to enable more cheques to be handled electronically, making the payments system faster and more efficient.
By NEIL HARTNELL Tribune Business Editor
