Focus on Cash Management Trends: eBAM

Recent SWIFT electronic bank account management (eBAM) initiatives have clearly struck a rich vein of corporate demand for broader servicing improvements, with SWIFT taking their first step into this new territory via XML. The industry working group now reports a steady stream of enquiries and increased enthusiasm from customers of all sizes. But just why is eBAM pressing all the right buttons with corporates?

At Your Service

The financial crash and subsequent global recession of the past two years has narrowed the choices available to corporates in terms of where to bank. This in turn has focussed the desire to get the best out of existing banking relationships.

Once payment processing and receivables management has been streamlined and automated, and cash positions can be reported and even forecast with increasing reliability, it’s time to consider those other activities that still demand a telephone call or a letter to the bank. eBAM is just one of the areas where there are opportunities to take a fresh look at the way common service requests can be handled to improve communication and convenience for all involved.

Caroline Lacocque, previously responsible for the rollout of corporate access at SWIFT, now with HSBC in Hong Kong, confirms this: “There has been a substantial increase in the uptake of SWIFTNet in Asia over the past few years. Corporates are now realising the advantages that SWIFT can offer in terms of rationalising bank connectivity and end-to-end visibility over their value chain. At recent treasury technology events organised by local treasury groups in southeast Asia, Hong Kong and China, eBAM sparked a lot of interest, and various large Asian corporates have since started investigating how to successfully implement this solution. It is clear that dematerialising bank account management flows can bring significant benefits such as speed and certainty in the cash management area.”

Everybody Hurts: Customer Needs

Corporates are challenged by countless business pressures in the area of bank account management including but not least the relentless spotlight of Sarbanes Oxley (SOX) reporting requirements. Add to that the struggle of gathering up-to-date information from multiple banks in time to complete the annual audit process. Not to mention that businesses regularly open and close bank accounts, perhaps related to property management, retail outlets, media activities or short term projects. The need to get a bank account up and running with details confirmed and ready to make or receive payments can be a milestone on the critical path to business success in these situations.

Organisational changes, such as a senior executive retiring, or a round of promotions, can trigger an update to the key signers’ limits. This is a heavy but time-critical administrative burden that involves getting the necessary mandates updated and confirmations back from the account-holding banks.

Increasingly influenced by the availability and range of internet services in our personal lives, corporate customers also expect these online efficiencies to improve their busy lives at work. The great news is that increasing adoption and support of SWIFT eBAM XML by banks can start to make eBAM a reality that will soon help to alleviate some of these burdensome pain points.

Gerrit Willem Gramser, director treasury at AkzoNobe , agrees: “At AkzoNobel, we aim for simplicity, transparency and control over all of our cash management processes which support operations in more than 80 countries. We believe that eBAM can bring just that to bank account management.”

Paper, Paper Everywhere

As with all things ‘e’, one of the attractions of eBAM is the ability to reduce the dependency on paper. Whether the concern is printing, storage, courier delivery times or merely the trouble of chasing signatories around the office, any option to deliver via email instead of ‘snail mail’ is to be enthusiastically embraced. The beauty of the latest developments in digital identity and security provisions is that banks can start to overcome some of the barriers to online acceptance. These vital initiatives bring the ability to associate real people with their electronic signatures with legally binding enforceability.

What about those situations where paper is an unavoidable part of the corporate to bank relationship? After all, even the transition from paper to electronic communication will usually demand another signature set to confirm the adoption of eBAM. All banks are bound by their international and in-country regulators to comply with industry-level policies and compliance surrounding the provision of documents at account opening.

To try and address the underlying problem, banks are seeing an evolution of streamlined global account terms and conditions to try to lighten the paper load. The aim is to reduce the number of signatures to one set to cover both account opening and e-channel or internet platform reporting – a challenging but achievable goal. In further recognition of the fact that all corporate administration is still driven by paper resolutions, identity documentation and the endlessly notarised copies demanded by many counterparties, not just banks, we foresee that the best eBAM solutions for either host-to- host connectivity or internet will come complete with the ability to attach all your electronically signed documents and retrieve them from a library when needed. The age of the paperless corporate office is closer than you think.

Keep your Eye on It

Treasurers and finance professionals have had a tough couple of years, with all their professional skills being tested to the limits in this ever-changing environment. Tightening belts in the corporate world has often translated into smaller teams and a need to minimise the time spent on administrative tasks instead of more mission critical activities. And while we’d like to flatter ourselves and think that a call with the bank is a highlight of our customers’ day, we do know that we’re just one of a hundred other things on the ‘to do’ list. So how can banks help?

  • For administration requests, on-boarding projects and the inevitable payment queries, provide the ability to check status and progress online – quickly, when it suits you.
  • Alerts to help manage your workload, and avoid the need to log on until the time is right.
  • Online communication tools, so that when you spot a discrepancy, or when an activity is running behind schedule or needs explanation, you can instantly send a message to your bank, safe in the knowledge it will always reach the right person.
  • These features are already available for many transaction-related products and seem certain to be of even greater benefit when offered in line with new eBAM services as well.

A Final Word

With many movers and shakers already convinced and advancing towards eBAM with their technology and banking partners, the final piece of good news must be that certain benefits uncovered in the foundation stages can be shared by all, regardless of whether your company is at the vanguard of eBAM adoption or not.

For example, as part of the wider activities in preparation for eBAM, improving and streamlining the account opening processes, introducing greater clarity in forms and regulatory document requests and implementing common platforms for staff – all of these should enable faster turnaround times and a better experience for all banks and their customers, no matter how large or small. Together, we can take the first step on this journey, but hopefully with the wind at our backs.

To learn more about HSBC Global Transaction Banking, please visit the company’sgtnews microsite.

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