SINGAPORE -- During a brainstorming session on electronic bank account management (eBAM) at Sibos, financial professionals discussed what it might take for eBAM to gain widespread adoption. One idea was to merge eBAM and KYC.
The primary reasons to adopt eBAM—account management being an arduous, paper-based process—haven’t apparently been enough to get buy-in from most corporates. But what if there was a little added incentive for corporate treasurers, such as a KYC registry?
Michael Knorr, head of payments and liquidity risk management, global payments for Wells Fargo, noted that corporates have been reluctant to invest in eBAM over the years because they don’t feel they can justify the cost. Thus the push for eBAM by SWIFT and banks like Wells Fargo ceased substantially. “It sort of stopped,” he said. “It’s not so much that they didn’t recognize why it’s important—because it is—it was, is there enough critical mass to justify the investment.”
A corporate treasurer in attendance noted that if eBAM featured a standard onboarding process, that would have value. “The banks are always asking for the same thing on a different day,” she said. “And we can’t automate that because IT will complain: ‘We have 50 banks and we have to build 50 interfaces from our ERP or from our TMS to automatically populate these forms.’ It doesn’t make sense. For corporates, time is of the essence, automation of data where it is already available is key. So if you have all this data that is required from us in a standardized repository, we can then populate those requirements.”
Merge eBAM and KYC?
Another attendee noted that this type of repository sounds a lot like a know-your-customer (KYC) registry like the one SWIFT has introduced—only for corporates instead of correspondent banks. “Maybe you could merge the eBAM repository and a KYC registry together,” he said. “If the information was updated in a single repository, it could get pushed out to all of the institutions.”
The group all agreed that if this eBAM repository could be used for KYC—that might be the one thing that gets it to go mainstream. As treasurers have noted, having a simple solution where you can give all your banks all the information they need at once and be done with it would be a godsend.
However, another attendee warned that creating such a solution that encompasses two big areas might actually prevent eBAM from breaking though for a long time. “It’s the age-old problem—do you build the elephant solution that takes years, or do you build the simple, easy solution,” he said. “So where is that happy middle ground so that you’re providing something that’s of real value?”
Knorr countered that one could make the argument that the tactical solution, as-is, has not been good enough. “So we’ve got to take it to the next step, and if we use existing components, like the [SWIFT KYC Directory] that’s already been structured, we’re not doing anything new. We’re just expanding,” he said.
At this point, SWIFT is not including corporates in the KYC Registry, but the organization sounds like it may be open to it in the future as it continues to onboard more corporates. “If you look at how many members we have today and how many we’re going to have in the next five years, the corporate segment will be a big player in our community,” Matt Monaco, head of corporate sales, North America, for SWIFT told AFP. “As we start to look at building services for that particular community, financial crime compliance should be on the agenda along with other critical industry challenges facing the corporate sector.”