Bank is First Mover in Canadian E-Commerce

  • Written By: D. Geller
  • Published: December 22 1999

Event Summary

TD Bank (Toronto-Dominion Bank) of Canada (NYSE: TD) is creating a Canadian marketplace to bring E-purchasing and other services to Canadian companies. The bank is partnering with Commerce One (NASDAQ: CMRC) to create the marketplace and will make Commerce One's other networks available to its customers. (See TEC News Analysis articles: "Commerce One to Procure for the Antipodes...and Elsewhere" and "Commerce One Goes High, Wide and PeopleSoft"). The new marketplace will serve customers of all sizes, and after its initial offering of straight purchasing, will extend to these customers additional services such as dynamic trading, purchase cards and third-party services in information technology and logistics.

Market Impact

As the first to announce such a marketplace in Canada, TD Bank has a perfect right to say that it is defining the market. However, its announcement raises a larger question. Who should create an electronic marketplace? TD Bank makes a good case for banks getting involved. Existing financial relationships with many companies are a good base for recruiting market members, and the bank's ability to assist in funds transfer, cash management and trade financing will be attractive to many companies. What the bank does not bring to the table is recognized expertise in procurement or technology. Of course, any commercial bank will have specialists in each of these areas as part of the teams it creates to evaluate loans and investments, but by engaging in this venture the bank is effectively commoditizing the E-procurement marketplace business. By using Commerce One for procurement expertise, and a variety of ERP vendors and technology integrators to supply technical expertise for back-end systems integration, the bank is showing that anyone can create an E-procurement marketplace. It may take a big anyone, but this announcement tells us to expect dozens, if not hundreds of similar announcements in the next few months.

User Recommendations

A Canadian firm wishing to engage in E-procurement will certainly want to consider the new offering of TD Bank. Given its Canadian membership and links to Commerce One's international networks, TD Bank has a lot to offer to its customers, and might well be able to create a vibrant and efficient marketplace. In the process, it could easily become a de facto technology advisor to small and mid-sized Canadian firms.

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