The initiative puts the banks alongside technology suppliers NEC and its US subsidiary Niteo Partners, and Sun Microsystems, in a collaborative project to determine the viability of using Web services to exchange corporate customer and account data in a secure manner over the Internet.

The idea is to build a set of Web services, leveraging open standards like IFX and BAI2, to demonstrate the secure exchange of corporate working capital data. The project is also attempting to verify the validity of the "platform-agnostic" promise of Web services, by operating within a multi-vendor environment.

Bill Jetter, senior vice president of global e-commerce product development at Bank of America, comments: "This project lays the foundation for using open Web services standards for interoperability of financial services among financial institutions, their customers and service providers."

While many financial institutions exchange data on the Internet today, Web services technologies promise to allow enterprises to both leverage existing investments and achieve greater standardisation and improved connectivity with less technical and operational complexity than existing methods.

The first phase of the FSTC project is focused on system interactions with corporate treasury data across heterogeneous development platforms, namely .NET and J2EE. The proof of concept will aim to produce standardised Web Services Description Language-based services and a reference implementation for multi-bank cash management reporting.

The first phase of the project is due to be completed at the end of the month. The next stage potentially includes moving the phase one deliverables into a customer pilot operation with treasury workstation and portal vendors, extending the functionality of phase one to include new service operations for cash management, such as payments, extending existing support for reliable messaging, adding Web service monitoring/management functions and additional security features.

Glenn Dumond, vice president, treasury and securities services global enterprise architecture group at JPMorgan Chase, says the bank is using the project to validate the use of Web services as a secure delivery mechanism for transacting with clients.

Keith Harris, vice president of retail integration at Wachovia expects to benefit from the work in several ways. "The project allows us to work on broad, industry issues facing the deployment of Web service-based financial applications while at the same time guiding our internal development and deployment activities," he says.