CHARLOTTE, N.C. - Bank of America Corp. has announced plans to convert FleetBoston Financial Corp. to its "Model Bank" processing platform in 2005. Now analysts and consultants are divided over whether BofA needs to do the same with its California system, an unfinished task dating back to 1998's NationsBank Corp./BankAmerica Corp. merger.
"I honestly don't see a compelling financial argument for them to do it," said Amir Hartman, managing director of Mainstay Partners, a California-based technology-consulting firm, in a Charlotte Business Journal report.
At the time of the NationsBank-BankAmerica deal, which created Bank of America, company officials intended to bring BankAmerica onto the Model Bank platform and utilize a single system. Due to technical difficulties, the conversion was never undertaken; instead the bank has created workarounds between the systems. As a result, BofA customers who bank on both coasts can't easily make a deposit in an East Coast account via a California ATM, for example.
Jim Eckenrode, a retail-banking analyst with consulting firm Tower Group, said he's heard stories about some customer difficulties and believes BofA will eventually have to address the California question if it wants to cement its reputation as a national retail bank.
"It's been a complaint that I've heard from Bank of America customers, that there's this disconnect between the image that BofA has of being a national bank and what they can actually do to support that from a technology perspective," he said.
A BofA technology executive says "there are some plans on the board" regarding the full conversion of the California system, but nothing will be undertaken before the Fleet conversion is completed in 2005.
The bank also has separate deposit systems in Oregon, Washington and Idaho, as well as in San Antonio for its military bank that serves armed forces personnel. The Business Journal's calls to a bank spokesperson requesting information on when or if those systems would be converted were not returned.
As a former customer, Hartman said he would appreciate a single platform, but as a consultant he would not advise BofA to undertake such a costly overhaul for a small percentage of its customer base.
Hartman also noted that customers who need bi-coastal banking are likely using online banking, which eliminates some of the barriers caused by separate systems.
