Early interest in eBAM turned to industry fatigue as a
collapsing economy, vendor consolidation and 60,000 pages of bank regulatory
reforms delayed the rapid technology advances clients have come to expect.
Nonetheless after years of development and testing – and exaggerated reports of
its demise – eBAM has finally arrived. A group of leading banks, including J.P.
Morgan, has broken down key barriers to multi-bank adoption of eBAM by using
existing tools and is ready to implement it on a global scale so banks can help
treasurers streamline their account management process.
From the outset eBAM was conceived as a
shared process that corporations could use to centralise and share information
across multiple banks, using the International Organisation for
Standardisation (ISO) certified set of 15 eBAM messages. However, as the
marketplace evolved and eBAM development efforts dragged on, banks and third
party treasury vendors moved forward with proprietary solutions. While these
applications offer much more efficiency and far greater control than the
traditional paper process, they do not offer visibility and controls across a
company’s entire global banking network.
By leveraging the eBAM
process, today’s innovative third party applications become even more valuable
for the treasurer. The applications provide a single repository for
organising, storing and managing all the documentation required to support
every account everywhere in the world.
Applications tie in to
corporate human resources (HR) systems, making it easy to identify signers who
leave the company and issue instructions to remove their signing authority.
They are also built to allow multiple banks to access instructions and
accompanying documentation. This feature enables treasuries to streamline
workflows and save money by eliminating the use of couriers to send signed
While these proprietary portals facilitate
automated account management activity, they are not eBAM. By definition, eBAM
delivers a true multi-bank account management capability, using the ISO
standard message set. Without eBAM, treasurers with multiple banking
relationships still have to contend with different workflow processes
presented by their different banks. At the end of the process, the account or
signer information still needs to be consolidated with information from the
other bank’s portals in order to gain visibility across an entire account
In contrast, eBAM makes these third party applications
more valuable by enabling corporations and banks alike to use one standard
process and a secure channel to move data and documentation seamlessly between
corporations, third-party applications and banks. Corporations can make an
account change once, generate the eBAM message, attach the appropriate
documentation and broadcast that change to multiple banks. The system then
automatically tracks all the acknowledgments and confirmations to assure that
all requests were properly executed across the corporation’s entire bank
A New Breakthrough
Banks have discovered a
practical way to address the complex issues of process and channel that have
held eBAM back by using existing technologies. Understanding that only an
agnostic channel would deliver true efficiency, banks determined that they can
rely on the SWIFT secure channel and other host-to-host channels to move data
and authenticate requests. While eBAM works with any secure host-to-host
channel, the SWIFT network offers some practical advantages as the recognised
standard. With other host-to-host methods, corporations must negotiate terms
for, and establish and maintain individual secure communication channels to
support eBAM activity with each bank. As a multi-bank network, SWIFT can
provide corporations with access to all (or most) of their banks using the
same consistent, secure communication channel. Also, SWIFT offers processes
for delivery notifications and end-to-end signature, all of which help
strengthen message authentication.
In addition, banks have found an easy way to
sidestep a vexing issue that has dominated the eBAM debate and has debilitated
this nascent process since its inception: the question of which personal
digital certificate companies should use. Banks may elect not to require
digital signatures on eBAM messages, relying instead on SWIFT’s authentication
and validation technology. In fact, the exchange of such corporate level
certificates as SWIFT PKI (public key infrastructure) is integral to any
secure channel transmission. As such, these certificates can be accepted as
authorisation on behalf of the corporation to execute account management
activity. After all, the financial system relies on these same corporate
level certificates to move trillions of dollars in payments around the globe
each year. Clarity on this issue has helped corporations move forward to adopt
eBAM at a much quicker pace.
Beyond the issues of channel and authentication, eBAM
also requires a consistent process and user experience that makes it easy and
attractive for companies and banks to participate in. To address this issue,
banks have created a standard way to capture bank-specific details related to
account services. The solution: a standard electronic form (e-Form) that can
capture XML formatted data that is supplemental to the ISO standard, and
specific to the bank. For example, when a corporation wants to open an
account with a specific bank, it goes through the standard request in its eBAM
application. Once it selects the bank, the system presents the user with the
chosen bank’s e-Form to complete. As the user completes the form, the
intelligent document captures the input, converts and saves the input as an
XML string and binds the data to the form. The user attaches the form to the
eBAM message and transmits it to the bank.
From the user side,
the entire request is electronic. There is no need to print, sign and scan the
document and the e-Form can be saved with the account record for audit
purposes. Banks receive not only the ISO standard XML and the document, but
also the supplemental data captured on the e-Form. This is a powerful enabler
to help banks transform from a document driven process to a straight-through
data driven process.
With eBAM, corporations are able to use this same standard process anywhere in
the world they can open a bank account. In cases where paper documents are
still required, the paper can either accompany eBAM messages or follow the
electronic transmission at a later date. This parallel process delivers the
huge advantages of automated logging, authentication, acknowledgment,
confirmation, notification and integration. Ultimately, separating the data
from the paper provides both banks and corporations with the improved
efficiency, control and visibility of a data driven, closed loop process. It
won’t happen overnight, but as more countries become comfortable with the
enhanced veracity and auditability of the electronic process, the need for the
parallel paper process will fade away.
With the arrival of eBAM, treasurers and banks now
have the secure channel and standard process they need to manage and service
bank accounts on a global scale. As the solution uses existing tools, it is
easy to adopt and use. With a production eBAM service in place and practical
experience to share, J.P. Morgan is one of the banks working with industry
stakeholders to drive broad adoption of the eBAM process. In recent months
SWIFT formed a working group of banks, corporations and vendors under its
Common Global Implementation (CGI) initiative to achieve this goal.
In the meantime, there’s no reason for corporations to wait for eBAM
technology to reach its full expression before adopting the process. Help is
available to enable them to take full advantage of the evolving eBAM
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