Octasoft lessens wait for e-finance

By April Mo and Richard Pearson, The China Post

As more and more business is being conducted online, Octasoft is helping to guide major banks and their customers in the Asia-Pacific region into the world of e-finance. Founded in 1997 by Taiwan-natives Simon Horng and Kevin Liang, Octasoft serves its 15 customers from its headquarters in California’s Silicon Valley. Octasoft’s clients include ChinaTrust Commercial Bank, Asia Pacific Bank, Chiao Tung Bank, International Commercial Bank of China, Korea Exchange Bank, Taipei Bank and The Capital Group Companies, Inc. Horng, who received both his master’s and doctorate degrees from the University of California in Los Angeles after graduating from National Taiwan University, says the company is looking forward to penetrating mainland China’s banking market within the next two to three years. Specializing in e-finance front office solutions, Horng says his company is waiting for mainland banks to complete their upgrade of back-office systems. Octasoft has offices throughout Asia including mainland China, Hong Kong, Japan, South Korea and Taiwan. While its products are developed in the United States, integration and service is carried out in its respective Asian site. The company’s main product is the ePlatform financial solution, an open and extensible software platform that functions as the backbone infrastructure for cross-platform connectivity and system management. The iBanc Suite runs on top of ePlatform and allows clients to offer its customers access to their accounts online. The iBanc Suite currently offers applications such as those that streamline all cash management operations, automate payment management processes in any currency, and monitor the trade financing process. Horng said that the infrastructure provided by its product is open enough so that clients can easily integrate other applications and systems. One of the greatest impediments to the growth of online banking is the fact that customers are quick to drop the services if they are not satisfied. According to one U.S.-based study of online banking roughly half of all subscribers wound up canceling their accounts within the first six months.

Horng acknowledged that this remains a problem for online banking purveyors who, he said, need to provide better services for customers. “The current services offered by banks are too primitive for many customers, they want to do more than just basic cash management and fund transfers. You can’t attract customers this way,” he said.

Horng also said that retention rates are generally higher for corporate customers than for retail customers though both are still problematic.

According to Horng, banks are still working to understand online banking themselves. “It’s a new area for most banks and they need to do more product and marketing research,” he said. Luckily for Horng, responsibility for improving services and offerings falls to the individual banks and not Octasoft, which handles only the infrastructure to support whatever the banks chose to put forward.

Horng said that online banking is currently working on “Chapter One” of its evolution and that within the next 1 to 2 years would reach a more mature “Chapter Two and Three” level. Security, another area that tends to trip up online banking, is not as serious a concern as people perceive it to be, said Horng. “Online banking is actually very secure, much more secure than phone banking,” he said adding, “phone banking isn’t secure at all.”