You Need to Have a Conversation With Your Bank: How eBAM is Changing the Way We Talk

Corporate banking relationships have never been more complex than they are today. As corporations struggle with globalisation, regulation and a transient work force, it is becoming more difficult to control one’s bank account inventory while simultaneously managing counterparty risk. All these trends have brought the concept of bank account management (BAM) to the forefront of the treasury community.

Properly accounting for and controlling one’s bank accounts and their associated legal entities, signers, authorities, bank policies, practices, mailing addresses, contact information, as well as audit and legal requirements, is a daunting task all on its own. Trying to communicate this information with your banks and keep it all in sync is nearly impossible. Countless letters, spreadsheets, faxes, and phone calls are exchanged in a never ending attempt to accomplish one single goal: accurate synchronisation of your company’s bank account data with your banks. Thankfully, the days of communicating sensitive bank account data over snail mail, email, phone and fax are over.

Electronic bank account management (eBAM) now allows treasurers to securely open, modify, and close bank accounts with the touch of a button. Brought to life by automated BAM software, eBAM provides a highly structured and controlled methodology for a company and its banking partners to synchronise bank account data and more effectively manage accounts. The end result: faster, more controlled corporate-bank communication that saves treasury time and money.

eBAM’s game changing potential rests in the fact that it is an open standard maintained by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) – an international network of over 9,000 banks and corporations. Any bank, corporation, or solution provider can incorporate the eBAM standard into its processes, greatly increasing eBAM’s odds of adoption. And because it is backed by SWIFT, a huge organisation with global reach, eBAM will not fail due to lack of exposure. But more importantly, eBAM’s bright future lies in the fact that it is a standard.

Up until now, different banks have required different information to perform various account communications. This has forced many companies to maintain separate account opening, change, and close request reporting requirements for each bank they do business with.

eBAM solves many of the problems created by this complex web of requirements by standardising the conversations that can be had between banks and corporations. And while eBAM won’t eliminate some of the specific supporting document requirements that banks demand, it standardises the way bank account management is handled across all your banks. For example, a new account request at one bank is formatted in exactly the same way as a new account request for another bank. This standardisation creates a common bank account management language and is perhaps the greatest promise eBAM portends.

The eBAM language is composed of 15 specifically designed XML-based messages that, when taken together, allow companies and banks to conduct five common bank account management conversations. These five types of conversations allow you to perform virtually all bank account management tasks electronically:

  1. Account opening request – Ask your bank to open a new account on behalf of your company or one of its subsidiaries.
  2. Account report request – Ask your bank to confirm all of the information it has on file for one of your bank accounts; great for audit requests and keeping your bank account data in sync with the bank’s.
  3. Account maintenance (no mandate) – Ask your bank to change the information about one of your accounts not related to mandate (signer and authority) information.
  4. Account maintenance (mandate only) – Ask your bank to change the mandate (signers and authorities) information on one of your accounts.
  5. Account closing request – Ask your bank to close one of your bank accounts.

Most eBAM conversations begin with a conversation starter message that you send to your bank through an electronic network using your company’s BAM system. These conversation starters begin a back and forth exchange of automated electronic messages between your company and the bank that confirm receipt of each message, allow additional information to be requested, and finally confirm that the requested action has taken place. The standardised, electronic format removes many of the obstacles posed by traditional manual communication methods. No more waiting on the mail, maintaining customised communication protocols, or losing track of that account request you faxed to your bank weeks ago – instead, everything happens quickly, electronically, and in a standard format. Not only does this save time and money, but with your account data electronified, you can easily centralise your account data, audit and track bank conversations, and implement a bulletproof control framework.

To take advantage of eBAM, four critical factors are required:

A corporate system capable of starting eBAM conversations and acting on a bank’s response

With the release and ISO approval of the SWIFT eBAM message formats, software systems are now available that will allow corporations to start and respond to eBAM conversations with their banks. The majority of these systems are upgraded BAM solutions that already have a database of account information to work with. After all, it is difficult to have an eBAM conversation with your bank if you don’t know what you’re talking about – that is, if you don’t know your account details.

A banking system capable of receiving, internally routing, and responding to the information contained within eBAM messages

A number of banks have outlined plans for eBAM. Some are planning robust systems that will allow full straight through processing of eBAM requests. Others are implementing systems that are only inward facing, requiring unique logins, while still others are asking “what is eBAM?” Like many treasury innovations in the past 20 years, corporate treasury professionals will have to take the lead in convincing their banks to fully implement effective eBAM solutions.

A communication channel through which corporations and banks can send and receive eBAM messages

While it is technically possible to communicate eBAM messages over any electronic channel, the most logical eBAM communications platform is the SWIFT network. Large, secure, reliable, and international, the SWIFT network will almost certainly become the de facto communications channel for eBAM conversations. Whether accessed directly by a corporation or through service bureaus, the SWIFT corporate access programme provides the perfect communications tool for eBAM conversations.

A method of establishing trust between the company and bank to ensure that the eBAM messages are authentic, authorised, and unaltered

eBAM cannot function without trust. Corporations must be able to trust their banking partners are who they say they are and vice versa. To establish this vital trust, eBAM uses digital signatures to ensure that documents and requests sent back and forth are actually from the person claiming to have sent them, he/she is properly authorised, and the messages have not been altered in any way. Most treasury professionals are familiar with digital signatures and have the key fobs to prove it. This is because many digital signature methods require treasurers to maintain separate hardware or software devices for each relationship – the equivalent of having a separate pen for each bank. Going forward, eBAM will require a more efficient solution. Currently, there are industry stakeholders working to streamline identity management within eBAM by advancing a single-sign-on approach. These bank-neutral providers would manage the overall service while each subscribing bank would issue its own certificates and devices. Once a treasurer receives one certificate or device from one subscribing bank, he/she can use that same authentication tool for all subscribing banks. This allows the treasurer to have only one token for authentication, authorisation, and non-repudiation for a variety of communications with all his/her banks, including eBAM conversations.


eBAM is here. The standard is approved, the software is available, and the network and authentication methods are established. On top of this, there is a strong desire to implement eBAM among both corporations and banks. Still, there will be hold outs on both sides of the bank-corporate divide as some wait for others to take the first step. This type of chicken and egg game will only delay the inevitable – like it or not (and there’s really no reason not to like it), eBAM is happening. Early adopters will influence the future of the standard and gain a competitive edge by realising eBAM’s benefits before others. Late adopters will be forced to accept approaches devised by others while lagging behind the leaders. Strategic treasurers will implement eBAM ready BAM solutions today while pushing their banks to do the same. eBAM is happening and it’s changing the way we talk… you need to have a conversation with your bank.


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