Why Bank Account Management is not just a nice-to-have anymore

By Kyriba June 13, 2016

What exactly is bank account management (BAM), and why should a company care about it?

Let’s address the first question. Corporate bank account management is the process whereby companies, both large and small, manage the opening, maintaining, and closing of its bank accounts and legal entities. Additionally, an incredibly important aspect of the BAM process is the administration of the corporate signers such as Directors, Vice Presidents, CFO’s, etc. Many organizations manage this process manually via Excel or some homegrown solution, such as an Access database, where the various events – opening, modification, closing of bank accounts – are not dynamically linked together.

Additional reading: Building the Business Case for a Treasury Management Solution

What about desired security surrounding any of these events?

These manual solutions probably don’t include a tailored approval workflow around these events. The fact that this process is often something that must be administered across multiple bank relationships makes these manual or homegrown solutions very risky and inefficient. The various corporate authorities – dollar approval level and bank account-specific detail – need to be managed, as well. Multiple documents such as signature cards, banking resolutions, and service profiles are affected by event-related changes like officer promotions, terminations, new hires, etc. Keeping up with these changes in a manual fashion takes too much time and opens up the company to the possibility of very serious errors. Finally, administering the BAM process in a manual, or stand-alone fashion makes both reporting and internal auditing nearly impossible.

What makes for an effective BAM solution?

Let’s take a look at some important elements and the reasons they should be considered:

>        Strong anti-fraud component. Without dual authority included in the addition, modification, and deletion of BAM elements, who’s to say that trusted signers wouldn’t take advantage of this gap and make themselves signers over their own personal bank accounts? It could happen!

>        A strong BAM solution allows for the complete and integrated visibility of all BAM elements – even within multinational companies.

>        Robust reporting with minimal button clicks. Account opening and closing letters should be formatted to align with specific banks’ requirements. IRS reporting around foreign bank and financial accounts (FBAR) is also a huge requirement for companies with foreign interests.

>        It also offers complete audit trails across all activities listed previously. Knowing when a BAM element is added, changed, or deleted, and by whom, AND when, is vital, right?

>        Scalability as a feature may not be something that jumps out as a must-have, but it is extremely important. In the US, multi-bank electronic bank account management (eBAM) solutions are not yet a reality as banks first look to implement eBAM on their own proprietary portals before looking at connecting to outside technology such as SWIFT and treasury management systems. However, a good BAM solution must be “eBAM ready” to eliminate the need for a completely new and time-consuming implementation once eBAM is ready for multi-bank communications.

It is important for CFOs and Treasurers to know that BAM is not just for big companies with hundreds of bank accounts. Every organization – large and small – should have visibility and control over their corporate bank accounts. Fast growing firms, especially, will want to ensure that best practices for the opening, closing, and tracking of bank accounts is in place early. Treasury technology offers simple, inexpensive solutions to enable productivity, fraud prevention, and regulatory compliance for bank account management, making BAM easy to accomplish.

Activate Liquidity.

Transform how you use liquidity as a dynamic vehicle for growth and value creation

Find out how