Why is eBAM such an important topic today?
MLF: Bank Account Management (BAM) is the latest area in Cash Management where we, banks and corporates, have to find efficiency improvements. This is especially true in Europe, where we have been very much focused on SEPA migration and implementation for the past few years.
Now is the time to look for ways to optimise treasury processes again and electronic bank account management (eBAM) is one of the obvious avenues for optimisation from a corporate perspective. Some treasury departments are already starting to make this process more efficient; asking their bank to provide more visibility over their bank accounts and over the handling of the request for changes, and so on. We are starting to receive more and more RFPs asking for improvements in BAM, with the ultimate goal being eBAM. We see this as a growing trend. Almost every week, sometimes even twice a week, we are being asked to provide information around what we are able to do in this domain.
KA: Interestingly, some of the corporates sending us requests are looking for a fully bank-agnostic model; others are more interested in using bank proprietary solutions. It really depends on each company’s banking relationship structure and their broader strategy in the cash management area. Technology also influences the choice here. If the company is connecting through a solution like SWIFT, for instance, then they are likely to be more interested in the fully bank agnostic solutions available through this network. Those without SWIFT will favour a proprietary solution.
At BNP Paribas, we can meet both these requirements. We have a proprietary solution called Connexis eBAM Dashboard which is an add-on to the Connexis suite, our international internet web banking solution. It allows for easy management of BNP Paribas bank account mandates, so that customers can easily and quickly manage mandate changes, including all legal entities, accounts, signatories and powers. All of this can be monitored in real-time with the help of our user-friendly dashboard. We have developed XML eBAM ISO 20022 standards, for an eBAM File Transfer solution through SWIFTNet File Act. In accordance with our customers’ priorities, we are implementing first the mandate management messages and scenarios (acmt.010, 011, 014 and 017).
What challenges do banks typically face in rolling out eBAM solutions to corporates?
KA: Digitising documents can be challenging, first and foremost. Initially, the digital document has to be recognised and accepted as having legal value in all of the countries the corporate is doing business in. Some documents cannot be digitised, however, because regulation requires a paper form, such as notarised or original documents. In Portugal, for example, proof of empowerment needs to be notarised. Furthermore, on both the bank and corporate side, electronic requests and answers have to be archived so that legal proofs can be obtained later if required.
In Europe, there is a new framework, the eIDAS European Regulation, which aims at providing a European interoperability framework for digital signature However, this is part of a recent regulation and it will only begin to be enforced in 2016. So for the time being, everything we are doing in this space is based on a directive from 1999, but the directive still needs transposing in each country. That makes it difficult to establish a one-size-fits-all solution across Europe at the moment, and why the new forthcoming regulation will greatly simplify what banks are doing in this space.
For the time being though, what is possible with respect to digital signatures in Europe varies between countries, and here we have identified three distinct groups. First, there are the countries in the north of Europe – the Nordic countries, the Netherlands – where there are many opportunities for digitisation. These are countries where digitisation is really in the DNA of the financial sector. The second group comprises countries like France, Germany and the UK. Here there have been some recent digitisation initiatives, mainly driven by governments and focusing initially on things like tax and payments to public sector bodies. Finally, we have a group of countries in the southern periphery of Europe where such initiatives are seldom seen and digitisation is in the very early stages. These discrepancies between countries mean that in some countries where we are serving our corporate customers it may be possible to have a fully digital process; whereas in other countries it will still be very paper-based and manual.
What is BNP Paribas’ role within the Common Global Implementation (CGI) initiative and what is being done from an industry-wide perspective to help eBAM adoption gain momentum?
MLF: The broader CGI initiative provides a forum for financial institutions, corporates and vendors to collaborate on and progress various corporate-to-bank implementation topics around the use of ISO 20022 messages and other related activities, in the payments domain. The initiative has prompted a number of working groups and BNP Paribas has been very active in the CGI eBAM working group, which is focused on fostering adoption and enhancing the quality, effectiveness and efficiency of eBAM standards and processes around the world.
One of the main objectives of the CGI eBAM working group is to simplify implementation for both corporates and banks by developing common usage of fields in the messages. This means defining standards that cover all eBAM business case scenarios, be that opening an account, closing an account or a mandate management change, for example.
With its wide geographical presence in Europe, BNP Paribas is in a unique position to help integrate local usages into the new standard. We were particularly active on the work to define version two of the eBAM standards, which was certified in 2013. We felt this was important because the first version did not reflect the way a lot of corporates work; one could not, for example, define a group of signatories, or define electronic mandates. Our eBAM File Transfer mandate management solution supports both version 1 and 2 of the SWIFT eBAM ISO 20022 standard.
Going forward, what needs to happen for eBAM to have widespread adoption – and what role can corporates play?
MLF: We need more corporates to start piloting and exchanging eBAM messages with their various banks, because, ultimately, this is a multi-bank issue. Having a standard in place is just the first step: it has to be piloted and tested by both corporates and banks to get the proper maturity required for mass adoption.
The circle is getting larger and larger, though. There are more solutions available on the market from vendors; there are more solutions available from banks; and there are more and more corporates showing interest in implementing such projects. Corporates are now really motivated and are beginning to sit down with us, and with their vendors and thinking about what things need to be tackled in order for this to become a reality.