True Stories: Procut makes net gains with online banking

24 Nov 2003

You don’t have to be a big company to be a major exporter. Irish small to medium-sized enterprises continue to earn overseas income for the Irish economy through the sale of goods and services to markets all over the world. Procut Engineering is just one such company.

Based in Virginia, Co Cavan, Procut manufactures tungsten carbide burs used in industries around the globe. Resembling drill bits, the burs are used to remove excess metal from engineering parts after moulding or drilling. A sister company, ATA Tools and Abrasives in nearby Belturbet, manufactures the compressed air tools used to drive the burs. Both companies are owned by the Scottish PCT Group and Procut handles the administration for both companies.

As an exporter, the company handles financial transactions with companies around the world. At the best of times this would be a headache, but not for Procut director Carmel Lynch (pictured). Lynch is responsible for managing the flow of money in and out of the company and was one of the first AIB customers to use the bank’s new Internet Business Banking [IBB] service.

“We would be a very proactive customer with AIB and we would find AIB in return to be quite proactive with us. AIB are always informing us of the latest products available and it is up to us the customer to either say ‘yes we will run with it’ or we won’t. We had Electronic Business Banking [EBB] installed in May 1998 and we were one of the bank’s ‘guinea pigs’ for the product. We upgraded to IBB in July of 2002.”

According to Lynch, moving to EBB was a major step forward compared to the manual system in use up to then. “There was just so much paperwork and manual handling and delays. So we saw EBB as quite a significant step forward and when we installed it we installed Paypath at the same time to handle payroll payments,” she explains.

However, while the EBB package did make things easier in some respects, it was not perfect. “For example we couldn’t do foreign payments,” recalls Lynch. “We could do payroll and Irish punt payments – and later euro payments. But we do a lot of business with foreign companies. We export to 26 different countries from this plant here and to 28 countries from our plant in Belturbet and not necessarily the same countries or the same customers.”

The new Internet Business Banking [IBB] product addresses this issue and many others. For a start, the product is networked while the older package could only be used on a single machine. This means that while only Lynch can approve payments, her staff can prepare transactions on the system from their own PCs.

The system resembles the personal 24-hour online banking service that AIB offers personal customers. The user can see the status of their account or accounts in real-time. However, there are significant differences. For a start it is more secure. Transactions are authorised by means of a digital certificate. In addition, it is possible to set up templates for frequent transactions such as monthly payments to suppliers where only the amount needs to be changed.

Lynch and her staff can also select the priority – and thus the cost – of a payment. Users of the service pay lower transaction rates – sometimes discounted by as much as 80pc – than those who use the branch, although there is an annual charge of €200. As far as Lynch is concerned, however, it’s worth it.

“I have live information at my fingertips,” she says. “I don’t have to be asking staff ‘did you ring the bank, did you get this and did you get that’. I can see instantly if any of our accounts are overdrawn. I can decide to transfer money between accounts so I’m not overdrawn overnight.”

The system also handles the company’s payroll requirements. The third-party payroll software calculates the payments and generates a file that is put onto disk. The disk is then inserted into one of the PCs connected to the IBB system and the wages are then automatically transferred from the company’s account to the employee’s individual accounts instantly, in the case of employees who bank with AIB, or within two working days in the case of those who bank elsewhere.

The only thing the system cannot handle is lodging incoming cheques. These must still be sent to the local bank branch. However, Lynch is trying to persuade those clients who settle by cheque to take a close look at the system.

IBB is available to any business with an internet connection and a PC running Windows 98, NT or 2000 and Microsoft Internet Explorer 5.1 or later with Microsoft JVM version 3809 and High Encryption pack. According to AIB spokesman Trevor McEvoy, however, the bank continues to develop IBB and working towards meeting the requirements of all customers, both by providing new online services and by providing access to the service through other platforms.

“IBB is a ‘best-in-class’ service and, as it is internet-based, it brings with it the flexibility that the internet offers,” says McEvoy. “As a result of customer demand, we developed the EBB services on the internet and added a large number of enhancements and new services which our customers wanted access to online.”