Bank account management : digital formats and risk management

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Bank account management : digital formats and risk management

As part of the FINSERVICES benchmark for cash flow organisation and payment mapping, we monitor the development of good risk management practices. For example, corporations are strengthening their risk management frameworks with modules for compliance/monitoring of international sanctions and asset freezes, verification of banking credentials, and bank account management.

Traditionally managed on paper and with the Microsoft Office suite, bank account management was often seen by CFOs as an area with “plenty of room for improvement”. At annual reviews, many auditors had comments about updating, consistency with banking partners, and audit trails.

The financial management team plays a key role in creating the conditions for a real virtuous circle, by rallying teams to improve all aspects of risk management and transitioning to digital formats. The team may work with a continuously-updated repository of banking credentials and cheque-signing authorities. This prudential framework is an integral part of compliance with the SAPIN II law.

In their role as a business partner, treasurers can contribute their expertise on risk management issues and, more specifically, on the repository of banking credentials and cheque-signing authorities. In their day-to-day work, they use a number of different functionalities to manage cash, financing and investments, payments, exchange rate/interest rate/raw materials risks, and more.

There’s a different type of cheque-signing authority for each of these, with corresponding authorisations and limitations, ultimately resulting in an actual legally-binding signature, relating to payments, often implemented with SWIFT 3SKey tokens…

Before deploying a bank account management module, the first step is to run a diagnostic on the central repository (companies/banks/agencies/accounts/signatory boards…). This step is a prerequisite, and is often an opportunity to optimise the repository or launch a review of the organisation according to the company’s strategy.

After that, the different types of mandates / authorities will be modelled in order to automatically generate the letters attributing or modifying the authorities, with signature cards and documents. Never fill out bank forms or official letters manually again… The company will be able to use a customised mandate letter (PDF) defined at the group level, pending a complete transition to the eBAM XML format.

Among the many tools on the market, the Thétys solution stands out with its advanced modelling features for cheque-signing authorities, including an event management system that covers attribution, modification and revocation of authorities and an extended audit trail.

As for the repository, the use of a digital dashboard lets users confirm that authorities have been correctly attributed, track inconsistencies, and administer the group’s key parameters. A dedicated module also lets users monitor risk exposure by country, with alerts for specific issues (asset freezes, currencies, recipients/aliases, transmission/account irregularities, etc.).

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