Treasury Today Country Profiles in association with Citi

Bank billing: how much?!

Pyramid made from stones on the black sand beach in Iceland

Standardised bank billing in an electronic format can deliver huge savings. TWIST has the solution but is it worth the effort?

Understanding bank billing is not always an easy task for large corporations, especially where operations span several countries and entities. Without automation, any form of data aggregation and analysis is labour-intensive, but minus such data the fees cannot be assessed with any degree of accuracy.

This is where the Transaction Workflow Innovation Standards Team (TWIST) Bank Services Billing (BSB) industry standard comes into play. The XML-based ISO 20022 standard, first published in September 2006, governs the format of electronic bills sent out by financial institutions to corporate clients, listing all the chargeable service events that occurred during a given period, along with detailed tax and currency information.

As at the end of October 2012, according to Paul Burstein, Senior Representative of TWIST, 12 major banks are live with the BSB, including two global banks “who wish to be un-identified”. Three additional banks are in the planning phase: a German, a Nordic and a US bank, all of which also wish to remain anonymous at this time.

The standards body has made good inroads into refining its offering in recent years. In July 2012 it announced that work with SWIFT to redevelop the BSB under IS0 20022 had come to fruition in the form of the camt.086 message (camt being shorthand for cash management). The current BSB v3.1 will co-exist with camt.086 until the industry has migrated to the new format which modifies (rather than replaces) the original version to meet ISO’s XML standards.

Corporate uptake and plans

TWIST standards are used worldwide by some 40 corporates says Burstein. He adds that the current “corporate hot spots” are the US and Germany, with the likes of GE, Boeing, Lufthansa, Siemens and Deutsche Post all having active BSB programmes in place.

Deutsche Lufthansa in Germany has been an advocate of TWIST for some time and is in the midst of preparing to roll-out the BSB to one of its Shared Service Centres. According to its cash manager, Martin Postweiler, the business is implementing an automated and centralised monitoring process for bank fees across all Lufthansa Group entities in all countries where it is possible to use TWIST (according to bank support). The roll-out, he says, will enable Lufthansa to centrally identify and change any payments matters, such as manual payments or non-STP payment, for the whole group. It will also facilitate a centralised monthly bank report of potential billing errors, removing any need for local bank/client interaction. Postweiler adds that TWIST reporting will enable Lufthansa to more effectively keep its bank account management up-to-date, with the reports capable of immediately showing all newly added accounts in TWIST countries and removing closed account data as soon as it is no longer required.

Lufthansa currently receives TWIST reports for around 40 countries worldwide from its two strategic cash management banks, Deutsche Bank and Citi. Postweiler reports that other providers, such as UniCredit and HSBC, will be looking into the provision of TWIST services for the airline.

Another Germany-based corporate, the global electronics and electrical engineering giant, Siemens, is getting ready to implement BSB-ready software. Company spokesman, Jonas Korte, says the work follows a period of testing and reviewing of live TWIST files that was carried out during the firm’s last fiscal year. Siemens, he reports, will adopt both BSB and camt.086 formats. “The provision of such files becomes an important request to our partner banks and their networks from now on,” states Korte.

Bank uptake and plans

According to Burstein, TWIST recently surveyed its bank users. Of the banks with v3.1 that are planning to produce the camt.086 format, he says four are planning this for 2013 and three for 2014. Two more banks are currently in the evaluation and planning stage but have not yet set a deadline.

Of the established supporters of TWIST, Barclays currently covers Sterling accounts only but is building out its billing platform to offer the Association for Financial Professionals (AFP) Global Service Code option (launched in November 2011) which adds to the US treasury association’s long-standing domestic bank billing standard. The enhanced platform is scheduled to roll out through the rest of 2012 and for much of 2013 and will offer both the original BSB v3.1 (enhanced by the AFP Global Service Code) and camt.086 versions.

Citi covers Western Europe and CEE, the majority of the MEA countries and Asia plus North America. There are plans to begin the testing of BSB reporting in the LATAM region with pilot clients set to go in Q1 2013.

Danske Bank has been a key player in the growth of the BSB project and was one of the first to go live with it back in 2007. It now reaches nine countries and has around 15 corporates using the standard and is currently working on collecting additional data such as interest and account balances.

J.P. Morgan is on course for a global roll-out of TWIST and offers an online tool with bulk export functionality and delivery via FileAct on SWIFTNet so corporate clients have instant access to their current and historical billing data. Host-to-host transmission will be delivered by the end of the year.

SEB’s Global Transaction Services unit is working to create a Billing and Reporting platform to extend beyond it present Nordic-only reach. In two years, it expects to be able to offer BSB reporting to all of its corporate clients across Europe.

Standard Chartered offers TWIST in ten countries across Asia, Middle East and Africa and plans to extend its service to two new markets by the end of this year and is looking to incorporate the AFP Global Service Codes by January 2013.

In June 2012, UniCredit Group started offering the camt.086 message format for corporate clients based in Germany, Czech Republic, Hungary, Slovakia and Slovenia. It has plans to cover Italy and all other Eastern European countries by the end of Q4 2013.

The other banks with live TWIST programmes include Société Générale (operating in France only), BNP Paribas (which is live in 15 countries) and Bank of America Merrill Lynch (operating across Europe, Asia, Canada and Latin America, but not the US where it uses the AFP model).

What next for TWIST?

A Message Usage Guide (MUG) is in production in co-operation with the Payment Standards Evaluation Group within ISO 20022. This, says Burstein, will give “detailed and explicit” instructions related to BSB v3.1, camt.086 and the AFP Global Service Codes. “The MUG is being reviewed at the next Payment SEG meeting. It should be published shortly.” Similar to TWIST’s BSB requirements document, the online document will describe the data content requirements of the BSB as defined by ISO 20022 and will include a sample camt.086 message and data mapping between BSB v3.1, the camt.086 message and the ANSI 822 standard used in the AFP’s Global Service Code.