Bringing eBAM a Step Closer

Published: October 01, 2011

Stephan Vandewiele
Head of Global Client Service & Implementation, GTS, RBS

by Stephan Vandewiele, Head of Global Client Service & Implementation, GTS, RBS 

With current developments in technology progressing rapidly, it’s clear that many of the more complex end-to-end processes between large corporate clients and their banking providers – such as those that require manual administration or the exchange of hard-copy documentation – will be carried out electronically in the near future. The prospects for electronic bank account management (eBAM) are excellent – so it’s no surprise that the market is beginning to wake up to the vast potential it can offer.

A multinational organisation is by its nature often a conglomerate that is spread across a series of territories, countries and legal jurisdictions. As a result, its employees may be operating many different electronic systems, with a multitude of banking relationships that encompass hundreds of accounts and a diverse range of processes, none of which may have much in common.

There is great potential in a banking solution that provides a consistent and aligned electronic framework that can be used across a number of corporate relationships.

The company may have expanded through mergers and acquisitions or grown organically but it is often the case in such large organisations that there are process inefficiencies, including the extensive processes required to open accounts from multiple locations worldwide. As a result, there is great potential in a banking solution that provides a consistent and aligned electronic framework that can be used across a number of corporate relationships. In addition, the provision of solutions that cut paper processes out and provide a fully electronic solution allows corporates to cut costs, reduce manual data entry errors, maintain control and simplify their approval management.

At present, many of the processes that corporates follow regularly – such as account opening, maintenance and closing – often involve some degree of offline processing or hard copy verification. This can be time-consuming, labour-intensive and inefficient. It can also add to costs significantly and it can be a challenge to identify where savings can be made without compromising accuracy or control. eBAM is designed to standardise the way in which these processes are carried out across the marketplace in order to deliver strong productivity and efficiency gains, eliminate paper processing and reduce the end-to-end time involved.

Beyond improved straight-through processing (STP) and traceability, the advantages of eBAM for both corporate clients and banks lie in reduced data entry – with lower risk due to less manual keying – and increased automation that will help to reduce the time required for processing requests. It’s likely that standardised control processes will also lead to better compliance with audit requirements.

Achieving eBAM

Although the benefits of eBAM are clear, to an extent the market is still defining the steps that need to be followed in order to achieve them. Not all banks are at the same stage in their recognition of and approach to eBAM, but within RBS we believe that it is well-placed to become the standard for the exchange of non-financial messages through secure communications channels, such as SWIFT – the financial messaging provider for more than 9,700 financial institutions and corporations in 209 countries – and EBICS (Electronic Banking Internet Communication Standard). In addition, eBAM is well-positioned as an enabler for STP by transforming corporate client instructions into direct back-office updates after an instruction is signed using a digital signature. In our opinion, eBAM has great potential both as a proprietary bank owned channel and as a bank-agnostic eBAM XML standard – with the decision on which solution to use depending upon each individual corporate’s banking relationships and structure.

Our existing Online Client Service (OCS) - an integrated part of our Access Online banking portal – already offers a powerful springboard into efficient account management processes. With the ability to open an account online anywhere in our network, clients can remain up-to-date on accounts and service requests, and view real-time balance and transaction information on accounts. Once an account opening request is submitted, corporates are able to download from OCS all required account opening documentation, which is automatically searched for and generated in the RBS requirements database. They can also submit service requests online and take advantage of online status and history information – regardless of the channel originally used to submit the request – and receive auto alerts when there is an update. We anticipate that OCS will feature heavily as we take the next step towards the full digitisation of processes.

In support of eBAM development, we have also been involved with the definition of the ISO 20022-certified XML standard for account management-related messages and we are a member of the Corporate Advisory Board that consists of SWIFT, banks and corporates (and aims to keep the standard aligned with the actual needs of corporate clients and banks). It appears that across the wider market, there is broad agreement that there will be some form of change. However, the form that these changes will take will differ for different corporates and be dependent upon the number of banking relationships held. Another factor that will influence how a corporate is exposed to eBAM is the way its banking partner has decided to develop eBAM capabilities. [[[PAGE]]]

eBAM pilot

SWIFT has already indicated its plans to engender greater standardisation within banking, and the promotion of transparency for corporate customers led to a pilot initiative. RBS was the only European-based bank in the pilot that included SWIFT and three other global banks, as well as seven of the four banks’ corporate clients. The RBS participation in the recent eBAM pilot has been significant and our approach has allowed us to help shape the fledgling format. This involvement means that as the industry moves towards standardised XML messages, we will be well-placed to offer a comprehensive solution to corporate clients.

As eBAM becomes available, corporates will want to ensure that they are well-placed to benefit.

The pilot tested the ability of the messages to support the business processes for both corporates and banks. Clients without a system that can generate eBAM XML-compliant messages were able to participate using a GUI provided by SWIFT called the Electronic Bank Account Management Central Utility (E-CU). The E-CU allowed clients to test the 3SKey digital signature solution that is provided by SWIFT for logging-in to the utility and for signing requests. In addition the E-CU also recognises the importance of giving clients functionality to look up the required documentation for their account opening or maintenance requests, and has provided this via a requirements documentation database.

As SWIFT recently confirmed “…significant milestones were achieved to support the SWIFT eBAM product development life cycle. Additionally, innovative concepts such as use and population of a central document database were progressed and show great promise towards the development of a full production version of the utility.”

The success of the pilot means the future prospects of eBAM are beginning to look even brighter. Through our work with SWIFT and other pioneering banks, we expect the obvious benefits of standardisation to result in a good take-up and the early adoption of eBAM by corporates. It’s clear that any new proposition will need to retain extremely high levels of security – digital signatures will be a crucial aspect of the standard which aims to provide a paper-free way of initiating account management requests.

Preparing for eBAM

As eBAM becomes available, corporates will want to ensure that they are well-placed to benefit, for example through the reduction of paper processing, increased transparency and control, and simplified approvals processes through digital signing. There are many factors that will influence corporates as they consider the prospect of eBAM and the appropriate solution for their organisations.

Corporates may wish to consider how the size of their organisation and the regions in which it operates could affect the way information is processed. It could be useful to assess the complexity of in-house systems and their compatibility with each other before the adoption of any new electronic processes. There may need to be an element of consolidation before the introduction of any new electronic processes to achieve the most efficient results. It’s also worth noting that many of the software providers currently deployed by corporate clients are developing modules that will allow the generation and reception of eBAM XML messages.

Lastly it is important to note that a corporate will need to consider the type of eBAM solution it wishes to pursue, based upon the structure of its banking relationships. A large multinational company will have multiple relationships, which might necessitate a bank-agnostic XML messaging solution to manage all bank account management centrally into one system (either via an in-house ERP platform or through a third-party provided solution). Alternatively if a corporate only holds one or two banking relationships, a proprietary bank-owned system could be a more attractive option, providing more functionality and the possibility of value-added services.

Now that the eBAM pilot has been completed successfully, at RBS we are working hard to implement the results from that test. Our intent in the near future is to enable the complete digitisation of the end-to-end process. While that may not be viable just yet, it’s clear that the potential benefits on offer will remain a core driving force behind the success of eBAM and the introduction of a more efficient way in which corporates and banks can do business.

Sign up for free to read the full article

Article Last Updated: May 07, 2024

Related Content