eBAM that Works!
With Delega announcing the start of the pilot phase of its cloud-based solution for bank account management, TMI talks to the firm’s CEO, Riccardo Balsamo, about his expectations for this truly collaborative project.
The lack of an effective bank account management solution is one of those challenges that has been around for an extremely long time. Despite the demands of managing signatories and KYC documentation being absolutely central to the role of corporate treasury, attempts so far to build a mechanism or structure – such as SWIFT’s electronic bank account management (eBAM) offering – have failed to gain traction.
Without a solution, the paper-based inefficiencies of the prevailing system persist, and so too the common frustrations of banks and their corporate clients. Repeated requests for the same information, slow communication between participants, and the sheer waste of time and resources, seemingly might have made finding a workable solution a priority. However, other more pressing issues, such as the global financial crisis of 2008, the pandemic, and now global economic instability, divert attention.
“It’s akin to the tale of the Loch Ness Monster,” comments Balsamo. “Just as everybody knows and talks about the monster but no one has ever actually seen it, so everyone knows about and acknowledges the bank account management problem, but no one has found a solution.” Until now, perhaps. With TMI Innovation Lab entrant Delega pushing forward with its pilot programme this year, something different is about to happen.
Heart of the challenge
Part of the reason for never finding the time to build a usable solution is that bank account management suffers from structural complexity. Because banks have different requirements, and have so far not agreed on a common approach, it’s incumbent upon corporate clients, especially those with multi-banking needs, to work within a fractured system.
“SWIFT’s eBAM is a great idea but has yielded limited results. It’s been around for years, but it has not become widely accepted because the concept clearly has a fundamental flaw,” says Balsamo. “The file exchange and technical communication protocol of eBAM overlooks the very essence of the process: the workflow and process aspect within and between the banks and their corporate clients.”
The eBAM structure heavily relies on banks changing or adapting their back ends to be able to process the file format received from each corporate ERP. “It’s too disruptive,” notes Balsamo. Indeed, the effort required to accommodate the changes understandably pushes this down the list of bank priorities, especially in challenging times.
In response, Delega has created a “shared workflow engine logic”, where the front end is the key to the platform’s adoption and ease of use. “It guides both corporate and bank users through the file process,” explains Balsamo. Indeed, where eBAM users were left to sort out the file inconsistencies themselves, Delega is the active intermediary in the bank account management process, effectively creating and storing one file that works for all.
In practice, the Delega platform enables companies to create, store, access, and instantly update their own signatory records in a single, secure bank-agnostic location. Their banks can then access and consume that data, just as they require. With both bank and corporate client having the same real-time view of individual levels of signatory authority, repeated requests to verify access rights – by different and sometimes the same bank – are immediately halted.
Design, code, test, repeat
It’s still eBAM in concept, but instead of building a system for the industry, Delega has built a system with the industry. Balsamo believes that using a “truly collaborative approach” to the platform’s creation adds the essential ingredient that had been missing in previous attempts. The new platform, he says, “is built on the continual, open and honest input of both sides of the end-user equation”.
The Delega platform, 18 months in the making, now has under its belt a successful proof-of-concept (PoC) with some major banks and corporates. Biweekly meetings with participants saw Delega act as the “honest broker”, seeking to understand and mediate both bank and corporate perspectives.
During the PoC, Delega deployed an agile development process. This enabled short but continual cycles of “design, code, test, repeat”, giving the firm the confidence to progress to the full pilot programme. This has just commenced, with various multinational corporates and banks, with others waiting to come on board.
As with many digitalisation projects, the decision by all participants to press ahead with the pilot programme with what Balsamo describes as “a sense of urgency” has in no small part been accelerated by the process fractures caused by the pandemic. With data and wet-signature accessibility becoming a serious challenge, as opposed to an irritation, for many organisations the desire to find a fix is indeed evident.
Appetite and urgency
Delega is a start-up company. The fact that it has managed to engage companies of the size, complexity and diverse structure of its PoC and pilot participants also suggests to Balsamo that “there is a great willingness, appetite and even urgency in the market to resolve this issue once and for all”.
The fact that large companies with diverse and complex needs are now piloting the solution has an added advantage. If their efforts yield the expected positive results, all industry stakeholders will know that these have been achieved at the top end of the scale. As Balsamo notes: “Making it work for these organisations means it can work for everyone.”
The phased approach for the platform’s post-pilot roll-out, and all subsequent enhancements (it is, after all, likely to be an ongoing programme of development), will be managed by consensus. This is very much in keeping with the original guiding philosophy that says the platform will not be a product of Delega’s making, but one of Delega working alongside its bank and treasury partners. It may well be that the collaborative model is the one that finally solves the bank account management quandary.