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You Need to Have a Conversation with Your Bank
by Dan Gill, CTP, Director of Corporate Systems, The Weiland Financial Group, Inc.
Bank Account Management (BAM) and communicating with banks is a major challenge faced by every corporation with bank accounts. Automated programmes along with SWIFT eBAM stand poised to change the way we talk with our banks, revolutionising bank account management in much the same way email changed the concept of mail forever.
Corporate banking relationships have never been more complex than they are today. As corporations struggle with the idea of reducing their bank account inventory while simultaneously managing counterparty risk and meeting controls requirements, the concept of Bank Account Management (BAM) has been brought to the forefront of the international treasury community.
Automated Bank Account Management software applications help by providing a highly structured and controlled methodology for a company to manage its bank accounts.
Properly accounting for and controlling bank accounts and their associated legal entities, signers, the employees that have authorities over those accounts, bank policies and practices, mailing addresses, contact information, as well as audit and legal requirements is a daunting task. The days of keeping your list of bank accounts in a spreadsheet or a simple database have passed. Managing all of the data related to your company’s bank accounts is a difficult task on its own, trying to communicate this information with your banks and keep it all in sync is nearly impossible. Countless letters, spreadsheets, and phone calls are exchanged in a never-ending attempt to accomplish one single goal: synchronisation of your company’s bank account data with its banks. Automated Bank Account Management software applications help by providing a highly structured and controlled methodology for a company to manage its bank accounts. They even make valiant attempts at providing tools to streamline communications with banks. Until a standard method of communicating bank account management information is put in place, companies will have a difficult time asserting that they have effective controls around their inventory of accounts.
The recently released SWIFT eBAM message formats provide both the standardised format and communications capabilities necessary to communicate account management information between companies and their banks. SWIFT eBAM messaging consists of 15 specifically designed XML based file formats that allow companies and banks to conduct five common bank account management conversations. These five types of conversation allow you to perform virtually all bank account management tasks electronically:
- Account Opening Request – Ask your bank to open a new account on behalf of your company or one of its subsidiaries
- Account Report Request – Ask your bank to confirm all of the information they have on file for one of your bank accounts. Great for audit requests and keeping your bank account data in sync with the bank’s
- Account Maintenance (No Mandate) – Ask your bank to change the information about one of your accounts not related to mandate (signer & authority) information
- Account Maintenance (Mandate Only) – Ask your bank to change the mandate (signer & authority) information on one of your accounts
- Account Closing Request – Ask your bank to close one of your bank accounts
These five types of conversation allow us to perform virtually all bank account management tasks electronically. Most eBAM conversations begin with a request to a particular bank through the company’s bank account management system. Each of the five conversations begins with a conversation starter message that is generated by the system and delivered to the addressed bank electronically (preferably through the highly secure SWIFT network). These conversation starters begin a back and forth of automated electronic messages between the company and the bank that confirm receipt of each message, allow for the request of additional information, and finally confirm that the requested action has been taken. The standardised format and electronic communications remove many of the obstacles posed by traditional manual communication methods.