How do treasuries unlock efficiency and compliance in bank account management?

Ali Curi: Treasury ConversatION is an ION podcast where we discuss topics of importance with CFOs, group treasurers, and treasurers. Join us as we explore critical topics with industry leaders, product owners, and subject matter experts, providing insights and strategies tailored to the dynamic world of treasury management.

Hi, everyone, and welcome to Treasury ConversatION. I’m Ali Curi. On today’s episode, Steve Coglianese from ION Treasury will discuss the essential, yet often complex, world of bank account management, or BAM, a critical area for large organizations. Steven will help us understand the intricacies of BAM’s function, from regulatory compliance to risk management, and also to discuss best practices that can make bank account management more efficient and effective.

Glad to have you with us. Let’s get started.

Steve Coglianese. Welcome to the podcast.

Steven Coglianese: Thanks, Ali.

Ali Curi: Steve, before we get to our conversation, tell us about your exciting background and your role and responsibilities at ION.

Steven Coglianese: I am the global head of IBAM, ION’s bank account and bank fee analysis tool. I’ve been working with ION for about 15 years and I’m responsible for the strategic direction of the platform.

And really, I look to engage with clients to better understand their problems And build out solutions to solve their problems. And prior to ION, I was involved in treasury consulting where I helped companies select and implement treasury management systems.

Ali Curi: Great. Well, let’s get to it. Why don’t we start broadly, Steve?

Bank account management might seem straightforward. But we know it’s a critical function of any corporation. Could you give us an overview of what’s involved in managing bank accounts at a large scale?

Steven Coglianese: Sure. So bank account management teams have pretty wide responsibilities. They’re responsible primarily for making sure that bank accounts are opened and closed.

And this is to support the treasury function at a company. In addition, they’re responsible for signatories on all bank accounts. They’re responsible for updating banking platform users in many cases. And are typically a vital piece of the KYC or know your customer process as well as some regulatory and compliance work that needs to be done around bank account management.

Now, bank account management teams would typically be the gateway between their corporation and the banks that they work with. So administrative functions like communicating with banks to inform them of any actions that are needed are a key priority for these teams and then tracking important documentation and also the setup of services is important.

And lastly, all of the fees around the services that banks provide. The bank account management teams are typically managing those as well. So it’s pretty broad.

Ali Curi: Right. And there’s a lot happening. So we understand that effective bank account communication, both internally and externally, needs to be accurate and efficient.

How are companies currently managing these processes, these communications within their BAM processes?

Steven Coglianese: We often see that this communication is a big challenge for companies. Not only are they managing external communication with their banks, but they’re also managing internal communication amongst their teams.

This is often very disparate, emails, even in some cases paper based, and then when we’re talking about external communication with the banks, this is often disjointed, and it ranges all the way from needing emails and phone calls with the banks, to sharing physical paper and also potentially using different banking platforms.

And what we see in some more sophisticated settings is that there’s electronic messaging through secure channels like Swift, although that’s a bit more infrequent.

Ali Curi: You mentioned physical papers. Tell us about document management. What are the primary ways that clients manage documents? And how can they consider improving this process?

Steven Coglianese: For many companies documentation is actually a massive pain point. Same as what we were talking about with the communication channels. There’s often an internal documentation process and also an external one. So internally, a major challenge that a lot of our clients see is having to track documentation, and oftentimes they don’t have that in one place.

They also have to determine if the documents they have are actually valid. So many times we see that documentation has an expiration date and is often missed because it’s difficult to track. So looking at the external side, it seems to be a little bit like the Wild West to be honest. Companies are often hit with surprises in terms of the types of letters or forms that they need to fill in, how often this needs to happen, and probably the most challenging is the method that their banks will accept. So it ranges, like I mentioned before, from physically signed documents that must be mailed to the bank, all the way up to digitally signed documents with making the process as close to straight through as possible.

Ali Curi: I imagine that kind of complexity leads to a lot of challenges. From your perspective, what are some of the biggest obstacles that companies face when managing accounts, especially if they’re operating across multiple regions, internationally, etc.

Steven Coglianese: One of the biggest challenges that we’re seeing is just having a central place to keep track of all of their data, all of the documentation that we were just talking about.

And also all of the outstanding tasks that are yet to be completed. So I think many companies rely on small teams, or in some cases just one person. And that person or small team have all of the knowledge inside their head, but no ability to really share that knowledge. So this is a very large operational risk that many companies don’t realize that they’re exposed to.

And the last thing I’d say is companies have essentially resigned to the fact that they must follow a different process across their banks, but even still, they’re relying on remembering that process, that each bank that they work with, they must follow a different process. This is something that’s very difficult to do, especially with a company that’s operating in multiple regions and also has multiple teams with many different banking partners.

Ali Curi: Given those challenges, let’s talk about risk a little more, because what do you see as some of the key risks in bank account management, particularly for organizations that don’t have a centralized control or a standardized process?

Steven Coglianese: There’s definitely several risks that jump out immediately, especially in an instance where there’s lack of central control or a standard process.

So the first one I’d say is operational risk. I think this one’s pretty obvious, but it’s worth stating, if you don’t have access to a central database, or visibility into what the business process is for managing bank accounts and signatories, it becomes so much easier to miss out on something vital, like removing a signer from bank accounts who has left the company.

In addition to the lost time that companies see for having to manage the data in different ways and also having a disjointed process, there’d be another risk involved, and that’s around fraudulent risk. Now, this is a bit more rare, but it still is a significant risk to operations when bank account management teams miss out on something like removing a signer from an account.

Like I said, this is a bit more rare. I think the last risk is one that can cause significant concern and raise red flags all the way up to the treasurer or CFO level, and that’s audit. So following corporate policy is an important aspect of managing mission critical data and processes in an organization and not having that central repository for data or documentation or even having an agreed business process for managing accounts and signatories, it really opens up BAM teams to being flagged as an audit risk. And that’s something that I’m sure all companies would like to avoid.

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Ali Curi: Yes, I bet. And between all the challenges that you discussed earlier, They kind of seem to converge around compliance.

Let’s talk about that for a little bit. Regulatory requirements like SOX and FBAR are going to add additional layers to account management challenges. Tell us how do companies typically handle compliance and what are some best practices that you would recommend?

Steven Coglianese: So compliance, especially related to things like regulatory filing requirements like FBAR, which is Foreign Bank Account Reporting, this is very time consuming.

This requires that companies track who signers are, on which bank accounts, and in which locations. One of the key components of this is whether or not a signer is based in the United States. So, in addition, companies must track the start and end date for those signatories, and when they’re authorized on the foreign bank accounts.

And so, what they’re having to do is file this information to the United States government. And as you can imagine, not having a way to track all of this information easily can cause significant hurdles to completing these regulatory requirements on time. Now, in terms of best practice, having a tool that can track all of the foreign accounts, all of the U.S.-based signers and the intervals of their signing authority is a great first step. Just having that central tool now getting a system to automate the filing of the FBAR forms is even better. And what we’ve seen is that it could result in days, if not weeks of saved effort.

Ali Curi: Right, and staying compliant while keeping processes efficient, I’m sure can be a balancing act for most corporations, if not all of them.

Tell us where technology comes into play in this area. In what ways have digital solutions changed the way companies approach bank account management?

Steven Coglianese: So, luckily, we’ve seen a slow but positive move in the direction of automation between companies and their banking partners, and we’re seeing more of a willingness to invest in these types of solutions to centralize and automate the administrative tasks related to bank account management, but also related to tackling the fees that banks charge for the services that they provide.

Now, consolidating the request and communication process for bank account and signatory management into one platform, a central technical tool that can track all sorts of tasks, can communicate both internally and externally to the banks, has been a major change that we’ve seen in the industry that’s improved our clients bank account management teams.

Now we’re also seeing a willingness to accept digitally signed documents by the banks. And this is something that we’ve seen adopted more and more, especially on a global scale. And the last thing I’d say is there’s also been a surge in the ability to automate the reconciliation process for identifying the fees that a company should be charged and comparing that to what they were actually charged.

Now this sets up companies to help identify billing errors and also recoup those costs.

Ali Curi: Yes, I agree with you, especially given the potential for savings from identifying errors and overcharges. We have seen a huge shift also on the consumer side for electronic banking as it has a lot of potential. So let’s talk about a case study.

I wanted to bring up something that I read about Hilton, one of the world’s largest hospitality brands. They implemented IBAM across their global operations. Can you share how IBAM transformed bank account management for Hilton and what might others learn from their experience?

Steven Coglianese: Absolutely. So Hilton has quite a large number of bank accounts, as you can imagine. This is required to handle their large global reach. Prior to implementing the IBAM platform, they managed their banking process across many teams spread throughout the world. And each team had to follow different processes, as well as manage unique documentation. Gathering all of the details and documentation for just one bank account would take Hilton up to two months in some cases.

Now additionally, due to the size of their banking relationships, Hilton found it difficult to identify and manage all of their fees. It was something really that they could only track at the highest level possible. So when Hilton implemented IBAM for bank account and signatory management, they were able to connect with their banking partners to additionally automatically pull in bank fee statements, and they were able to have these reconciled against their contracted billing rates.

Now, additionally, having dedicated workflows in a central tool gave Hilton a way to streamline the management of their accounts and signatories. And this brought them greater visibility and essentially better oversight across their many teams. Hilton also benefited from the automation of their static data because IBAM and their ION Treasury Management System are automatically connected to where they can share static data between the two systems.

And then the last thing I’d say is what Hilton found was that within the first few months of implementing the bank fee analysis module, not only did they have greater visibility into their charges, but they also have been able to identify billing errors and opportunities for savings through negotiations and consolidation of their services.

Ali Curi: Well, Steve, I really appreciate you sharing your insight with our listeners, especially because case studies are so informative. Now, let’s talk a little bit beyond technology. Are there specific organizational practices or strategies that help teams manage bank accounts more efficiently?

Steven Coglianese: So the one message I think I would share with the listeners is you’re not alone in this.

There’s many teams who are managing similar processes who are struggling with manual effort, who are struggling with time consuming processes. I would highly recommend that just outside of technology that our listeners engage in the communities around them. This is something that’s important to ION. We’re building communities. We’re having our clients engage with each other, but even outside of the ION community, there’s groups that our listeners can engage in where they are able to communicate with their peers. In addition to that, I would say also engage in communication with your banking partners.

If there’s areas for improvement, this is something that you should discuss with your partners. And lastly, there’s solutions to the problems that our listeners are encountering. So engage with technology providers. Engage with your account managers and start the discussion.

Ali Curi: Great. Well, you’ve shared quite a bit with us regarding the challenges, some key takeaways.
What is the one big thing you hope listeners will take away from this episode?

Steven Coglianese: The one big thing I would say is just making sure you engage. With communities and communication, communication is key. Not only understanding what your internal pain points are and documenting those, but communicating that to your banking partners, communicating that to technology providers and identifying ways to solve those potential problems.

Ali Curi: Okay, great. Steve, thank you so much for sharing your insights with us today. But before we go, a quick sidebar. I have a career related question for you. My question is, what is some career advice you wish you had [heard] earlier your career?

Steven Coglianese: That’s a great question. I would say two things really come to mind.

The first one is, I would have liked to have heard earlier on, don’t be afraid to dive into a certain industry or topic that interests you. When I was coming out of college, starting my career, I had not really heard of treasury before. And I certainly did not expect to be part of such a niche topic like bank relationships and bank fees, but it’s been very rewarding.

So I would say, don’t be afraid to dive a little bit more deeply into something that jumps out at you. The second thing I’d say is listen to the issues when you’re engaging with your peers and with clients. It’s really easy to think of like features in products, but if it doesn’t solve a problem, it’s not really going to be as impactful.

So, one of the key pieces of advice I would say earlier on in a career is just engage with communities, engage with people around you. The more insight that you can gather about what problems are out there, the better you can work towards solving those problems.

Ali Curi: I think that sounds like some great advice.

Steve Coglianese. Thank you for joining me today. I hope you visit us again.

Steven Coglianese: Thank you so much for having me.

Ali Curi: And that’s our episode for today. You can follow ION Treasury on X and on LinkedIn. Thank you for joining us.