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Is your financial institution EDI capable?

The following questionnaire was developed jointly by the Bankers EDI Council of the National Automated Clearing House Association and the Treasury Management Association. We are reproducing it with the permission of these organizations. It provides a comprehensive set of data items, questions and guidelines for assessing a bank's ability to provide fullfledged electronic data interchange services. The questionnaire is oriented toward commercial banks. It covers receiving and originating transactions in an electronic medium. It also includes sections that can be used as part of a more formal selection process, such as a request for proposal or information. These sections cover implementation issues, the level of customer support and service, and detailed compensation factors. Business Credit[R] welcomes comments from our readers about this questionnaire. To receive the questionnaire via e-mail, readers may e-mail inquires to

Company Information

The questions in this section should be answered by the company issuing the RFP/RFI and provided to the financial institutions to which the questionnaire is issued, in order to give those institutions a profile on the company and an understanding of its needs and requirements.

Company Overview

1. Describe your company, including the following: major lines of business; name, number and location of divisions or operating units; customer base: annual sales or revenue; performance trends. Provide an annual report, 10K, 10Q and other relevant financial information, if available.

2. Describe the structure of your treasury organization.

3. List the units of the company that will be using the requested services. Are they centralized, decentralized?

4. Provide a funds flow overview or chart.

5. Discuss the company's business strategy as it relates to this service.

6. Describe the company's current capabilities and experience with EDI. Include information on: translation software used; data security capabilities; transaction sets currently used; current VAN connections and/or interest in direct connect.

Reasons for Issuing the RFP/RFI

7. Identify the reasons for issuing the RFP or RFI, such as: to promote a corporate philosophy or policy to use EDI, respond to an interest or requirement expressed by a trading partner, support specific applications or growth in volumes, or to change a bank relationship.

8. Explain your objectives for the service, the business problems you would like to solve, and expected results (e.g., to obtain a certain percentage of trading partners on EDI by a target date).

9. Discuss company policies (e.g., data security, documentation) and internal or external constraints (e.g., audit or regulatory requirements) that may impact the bank's response.

10. Describe the key decision factors you will use in selecting a service provider, e.g., quality, experience, innovative approach, customer service, price.

11. Specify whether extending credit to the company is a requirement for obtaining the cash management business.

12. State whether the business will be awarded to a single bidder or to multiple bidders. If multiple bidders will be considered, indicate which portions of the business may be bid on separately.

Operating Requirements

13. Describe the specific services the bank is expected to provide.

14. Provide an estimate of current and anticipated monthly processing volumes (dollars and items) and an indication of peak volume periods. Discuss whether your business is seasonal as it relates to this service.

15. Describe the current operating environment - its advantages and disadvantages.

16. Explain any special features and customization required of the bank.

17. Define expected quality levels and support services that should be provided.

Response Guidelines

18. Indicate the due date for the RFP response, the name of the person to receive the response, and the company's time frame for making a decision.

19. Provide the name, title, phone and fax numbers, and e-mail address, of the company contact for questions regarding the RFP. Explain any special arrangements for submission of questions, including plans to hold a bidder's conference.

20. Specify the number of copies of the completed RFP that should be submitted, and the format (e.g., hard copy or diskette).

21. Indicate whether the company will require an on-site visit to the bank's facilities.

I. Bank Background

The questions in this section will enable the company to better understand and evaluate the financial institutions in terms not directly related to the EDI services offered, but as business entities.

Safety and Soundness

1. Identify key measures of the bank's financial strength, e.g., capital ratios, market capitalization, total assets.

2. Provide ratings for the bank and/or bank holding company from two of the following agencies: Standard & Poor's, Moody's, Thomson BankWatch, Sheshunoff, or Lace. Include ratings for: [Customer to specify: e.g., senior debt, subordinated debt, longterm deposit].


3. List names, titles, phone and fax numbers, and e-mail address, and provide brief biographies of key bank contact personnel.

4. Will one primary contact be assigned to our account? If so, from which area of the organization?

5. How many employees does the bank have in key areas providing the service?

II. Receipt

The questions in this section will enable the company to understand and evaluate the financial institutions' capabilities and services with respect to receiving payments and remittance detail sent to the company by its trading partners, and what the institutions' capabilities are in terms of making that remittance detail available.

1. Indicate which of the following payment formats the bank is currently capable of receiving:









ASC X12 813 Electronic Filing of Tax Return Data

ASC X12 820 Payment Order/Remittance Advice

ASC X12 835 Health Care Claim Payment/Advice


2. Indicate which format translations the bank provides for the delivery of payment and remittance detail. ([ILLUSTRATION FOR FORMAT BOX 1 OMITTED] below)

3. For the delivery methods listed in the box, indicate which of the following remittance formats are available to the customer. ([ILLUSTRATION FOR FORMAT BOX 2 OMITTED] next page)

4. Can your bank combine paper and electronic payments into a single report format or a single data transmission? based upon the bank's capabilities as indicated in question II. #3, describe the options supported for this process and any constraints that exist.

5. Indicate whether the bank can report payment and remittance information on a same clay or next day basis for the payment methods listed and denote at what time it is available to the customer for each vehicle.

Payment Methods

Same Day (Y/N):

ACH Network Fedwire CHIPS Lockbox EDIBANX S.W.I.F.T. Other

Time Available to Customer:

ACH Network Fedwire CHIPS Lockbox EDIBANX S.W.I.F.T. Other

Next Day (Y/N):

ACH Network Fedwire CHIPS Lockbox EDIBANX S.W.I.F.T Other

Time Available to Customer:

ACH Network Fedwire CHIPS Lockbox EDIBANX S.W.I.F.T. Other

6. Indicate what information can be reported through the bank's on-line balance/information reporting system. Attach sample reports if appropriate.

[square] Information on payment amounts only [square] Detailed remittance information only [square] Detailed information on payments and remittances.

7. Describe the bank's ability to reassociate payments and remittance information when dollars and data are transmitted separately.

8. Describe the bank's capabilities to receive multi-currency and international payments with remittance information.

9. Please provide your bank's average monthly EDI/EFT transaction volumes for receipt as well as the average number of accounts and/or customers served. Indicate the number of receivers (customers) for which you currently process, by delivery method as provided in question II. #3. Also, please report the bank's transaction volumes processed, by payment format received and/or remittance data format delivered as detailed in question II. #2. If this data is not available, please report your receipt processing volumes based on your bank's method of measurement and describe that method of measurement.

III. Origination

The questions in this section will enable the company to understand and evaluate the financial institutions' capabilities and services with respect to originating payments and remittance detail from the company to its trading partners.

1. For the customer input methods listed below, indicate which of the following payment formats the bank accepts. [ILLUSTRATION FOR FORMAT BOX 3 OMITTED]

2. For the customer formats accepted as listed below, indicate which payment types the bank is currently able to originate. [ILLUSTRATION FOR FORMAT BOX 4 OMITTED]

3. Indicate which payment networks the bank employs to originate payments:

[square] ACH [square] Fedwire [square] CHIPS [square] EDIBANX [square] S.W.I.F.T. [square] Other:

4. For each network listed in question III, #3, describe the cut-off times in relation to settlement/value date, and the procedures and time frames for deletion and cancellation of payment orders.

5. Describe the bank's ability to accept and process a mixed payment file (e.g., single input with wires, ACH, and/or check output).

6. Describe the bank's ability to warehouse payment orders.

7. Indicate whether the bank can deliver remittance detail to the receiver of the payment under the following scenarios. (See Remittance Detail Box, Page 46)

8. Indicate how the bank determines which payment type and remittance detail delivery method used to originate payments:

[square] Bank Determines RDFI Capability

[square] Bank Acts On Customer Instructions (e.g., by means of the Payment Method Code [BPR04])

[square] Bank Maintains a Receiving Company Database

[square] Other

9. What type of assistance or services does your bank offer to your customers' trading partners with respect to the delivery of remittance information?

10. Describe the bank's ability to originate Federal and state electronic tax payments.

11. Describe the bank's ability to originate multi-currency and international payments with remittance information.

12. Discuss how daylight overdraft limits might impact your bank's processing of EDI payments.

13. Please provide your bank's average monthly EDI/EFT transaction volumes for origination as well as the average number of accounts and/or customers served. Indicate the number of originators (customers) for which you currently process, by customer input method as provided in question III. #1. Also, please report the bank's transaction origination volumes by payment type originated as answered in question

III. #2. If this data is not available, please report your origination processing volumes based on your bank's method of measurement and describe that method of measurement.

IV. Implementation

The questions in this section will enable the company to assess the financial institutions' implementation processes for EDI services. These questions primarily pertain to EDI origination services, as the implementation of origination services for a company is more complex than that of receipt services.

1. Please provide a detailed description of your EDI implementation and testing processes and a sample implementation schedule. Identify and describe any training which may be needed by our company.

2. What is the average lead time for EDI implementation? What are the critical factors which may impact that lead time?

3. Does your bank assign an implementation team? If so, describe the support provided during implementation to include training, technical assistance, user manuals and on-site meetings.

4. Please provide a sample copy of your bank's EDI customer agreement. Include copies of agreements for ACH, wire transfer, etc. as appropriate to EDI.

5. Do you require or recommend the use of prenotifications prior to the transmission of live ACH payments? If so, how long in advance of a live transaction .must a prenotification be sent?


V. Audit, Security & Control

These questions will enable the company to evaluate the audit, security and control capabilities and practices that the financial institutions employ for their EDI origination and receipt processing.

1. Indicate which methods of transmission security the bank currently supports. (See Security Box below)

2. If any method of transmission security listed in question V. #1 requires originator hardware/software, please describe.

3. Indicate which acknowledgment and control features the bank supports:

* ASC X12 997 Functional Acknowledgment

* ASC X12 824 Application Advice

* ASC X12 831 Control Totals

* Other:

4. Describe the bank's procedures for tracing payments and remittance detail after release for each of the payment mechanisms that the bank uses.

5. Describe the controls the bank has in place to protect data integrity, ensure that payment files are not duplicated or lost, verify data syntax, etc., via means such as editing, audits and control procedures.

6. What measures has the bank undertaken to detect or prevent fraud for EDI payments? What has been the bank's experience with fraud in this area?

7. Describe the hardware, software and physical/data security supporting your bank's EDI processing. Are any activities outsourced to third parties?

8. What back-up procedures does the bank have in the event of system failure? Please describe the bank's disaster recovery plans for EDI.

9. Does the bank maintain a test EDI system separate from its production system? If so, how is it used?

10. Discuss your bank's quality control process. Provide examples of bank performance reviews for your EDI services and the use of Bank Administration Institute (BAI) Quality Indicators for EDI, if applicable.

11. What historical/archival policies and procedures does the bank maintain for payments and remittances?

VI. Experience and Customer Support

The questions in this section will enable the company to evaluate the financial institutions' experience in EDI and the customer support they provide for EDI services.

1. Describe the EDI experience of the bank's staff, EDI customer service structure, performance and philosophy.

2. Discuss the bank's commitment to EDI in terms of strategy, capital investment and internal programs. How does the bank assess the future demand for EDI?

3. Does your bank have an active EDI user group? If so, please provide details of this group.

4. Discuss the support your bank provides its customers in identifying and establishing trading partners. Does your bank maintain a database of trading partners, including information concerning the EDI capabilities of the trading partners as well as their respective financial institutions? How does your bank tailor its support to meet the diverse capabilities and needs of its customers and their trading partners?

5. Once the implementation is completed, will there be a specific customer service representative assigned to the company? If so, please list the functional title of this individual and indicate where this person fits within the organization.

6. Describe your bank's inquiry and problem resolution procedures. What are your response objectives and how are problems prioritized?

7. Please provide three references of customers using the EDI services of your bank.

8. How do you advise customers of NACHA rules changes and their implications?

9. On which ANSI, NACHA or other industry committees does your bank serve (e.g., Bankers EDI Council, ASC X12, etc.)?

10. Describe EDI initiatives that the bank currently has for other customers that you feel represent noteworthy accomplishments or innovative approaches.

VII. General

The questions in this section will enable the company to understand the financial institutions' general processing capabilities for EDI origination and receipt.

1. Describe how the bank processes ACH return items and how customers are notified of these returns.

2. Describe the bank's debit origination and receipt service (e.g., authorization or filtering) capabilities. Describe any experience you have had with corporate debit programs. If you have customers operating a debit program, please provide one reference.

3. When and how does your bank post ACH debits and credits in terms of ledger and collected balances (e.g., memo posting policy and frequency)?

4. Please provide a listing of all ASC X12 transaction sets and versions of each that your bank supports.

5. With which Value Added Networks (VANs) does your bank currently maintain relationships? List and describe the VAB/VAN services your bank offers, such as receipt, storage and transmission of non-payment information. Distinguish between those services your bank provides directly and those services which are provided through an affiliation with a third party.

VIII. Compensation

The questions in this section will enable the company to understand how compensation is handled by the financial institutions.


1. Describe the bank's methodology for pricing EDI services.

2. Provide a price schedule for this service using TMA Service Codes. Include any onetime or set-up charges, and all other fees that will be charged.

3. Provide a pro forma analysis based on the attached list of volumes and services required [customer to provide], using TMA Service Codes.

4. Fees in this proposal are guaranteed for years.

5. How and when is the customer notified of a price increase?


6. Does the bank accept compensation in fees, balances or a combination of the two? If fees are accepted, is there a surcharge or a different price schedule for fee compensation? Describe.

7. What fee payment options does the bank offer (e.g., direct debit, ACH)?

8. Describe the method used to calculate the earnings credit rate (ECR). Is the reserve requirement deducted from the available balance before the ECR is calculated? If not, explain. List the bank's ECR for the most recent six months.

9. How does the bank calculate and charge FDIC insurance?

10. Can the customer decide how the balances in its accounts will be grouped for purposes of compensation (e.g., assessed individually, by division, or at the relationship level)?

11. When calculating average balances, are positive and negative balances netted?

12. How does the bank charge for overdrafts? Does the bank charge for use of uncollected funds? If so, how is the charge calculated?

13. What billing period options does the bank offer? How and when will the company be billed for deficiencies?

14. How long can excess balances be carried forward to apply to charges in future billing periods?

15. How soon after the close of the billing period is the account analysis available to the customer?

16. How are adjustments reflected on the account analysis?

17. If the bank operates in multiple states, can it provide a consolidated analysis of accounts maintained in more than one state?

18. Is the bank's account analysis available electronically via the ASC X12 822? If so, what versions are supported and by what methods can the analysis be transmitted?
COPYRIGHT 1998 National Association of Credit Management
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Title Annotation:Electronic Data Interchange Questionnaire
Publication:Business Credit
Date:Feb 1, 1998
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