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In: Accounting

What is a key prerequisite for using electronic bank account management (eBAM) to reduce paperwork? Bank-provided...

  1. What is a key prerequisite for using electronic bank account management (eBAM) to reduce paperwork?

  1. Bank-provided treasury management system
  2. Upgrade from BAI2 to BTRS
  3. TWIST standards
  4. Initial relationship development

Solutions

Expert Solution

The purpose of electronic bank account management (eBAM) is for companies to easily/efficiently manage the multitude of bank accounts they might possess. BAI stands for Bank Adminstration Institiute (US) and it is a not for profit organization which aims to improve the standrds of banking, specifically in operations and audit spheres. BAI developed a file format called BAI1, BAI2, BAI3 etc. which has standard codes for different types of accounts and transactions and is basically a means to report cash management balances in a standard way. BTRS stands for Balance Transaction Reporting Standard and is used by organizations to report international cash balance transactions over and above BAI2 (this is mainly limited to local, within US transactions) and is similar to BAI3. Twist stands for Transaction Workflow Innovation Standards Team and is again a not for profit organization aiming to develop XML standards for messaging in the financial services domain. Relationship development is self explantory.

eBAM requires appropriate messaging/communication between corporates/companies and the banks for automated accont management. This can be implemented in several ways, for example either by banks hosting an eBAM application, to be used by the companies or the corportae hosting the eBAM application, used to communicate with multiple banks.

While applications, standards, integrations etc. will all be required to enable eBAM, there can be multiple solutions. Now, these will not work and cannot be implemented if the banks, companies and relevant solution providers do not agree to work together, given the complexity of the task at hand as well as the potential number of parties involved. Thus, a key prerequisite will be (d) initial relationship development to enable this new way of working together

ekkarill92 answered 1 year ago
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