Swift, an international bank consortium that sets financial messaging standards, is starting a service to reduce the number of electronic credentials corporate treasurers need to sign documents with multiple banks.
The consortium plans to announce its Secure Signature Key token on Wednesday at the Swift Operations Forum Americas in New York. Through the member banks that sign on to offer the technology, their corporate clients' employees can use a single digital signature — instead of a drawer full of tokens — to verify and certify documents and payments processes at various account providers.
An employee authorized to access accounts usually has separate tokens for every bank the corporate client does business with. Most large corporations have accounts at dozens of banks for business-specific purposes and to spread risk.
Typically, tokens are used to verify an individual's identity. They use algorithms to generate one-time pass codes that corporate clients use to authorize the release of a payment and, in some cases, sign electronic documents for a bank through online portals.
"You might have a treasurer that's about to sit in front of his … workflow station and he might have 10 or 15 different secure ways to enter into those individual proprietary systems," said Eileen Dignen, the managing director for banking initiatives and accounts at Swift Americas. "As you could imagine when he opens the drawer and pulls out the 10 or 15 devices — that in itself creates quite a headache."
The point of 3SKey is to improve efficiency for banks and their corporate clients.
Swift, formally the Society for Worldwide Interbank Financial Telecommunication, made 3SKey available overseas last year and is now rolling it out in the Americas. The technology builds partially on an existing Swift program to access and set up accounts known as Electronic Bank Account Management, or eBAM.
The program, which went live in April, is intended to help Swift member banks process electronic instructions to open and close accounts, add and remove authorized users and other functions. Such steps can still be paper-intensive, in part because of aging treasury software and because banks have different protocols for handling such tasks.
Swift's eBAM provides a set of standards for member banks to use to process electronic instructions uniformly. But it does not address the fact that each bank requires its own separate identity verification method, which 3SKey aims to fix.
The concept of a single digital signature token for multiple banks is "essential to really being able to make electronic bank account management work," said Nancy Atkinson, a senior analyst with the Aite Group LLC research firm in Boston.
Even with a number of vendor products on the market, a bank's corporate clients perform some account maintenance functions electronically yet still have to print and sign papers to fully complete some processes, Atkinson said.
"We are moving forward into a digital world where you shouldn't have to fill everything out online and print it out and send it via mail," Atkinson said.
Swift is still getting U.S. banks on board. Bank of New York Mellon Corp. plans to test 3SKey this summer as part of a larger pilot of an eBAM-related service. BNY Mellon and other banks, including JPMorgan Chase & Co., Citigroup Inc., BNP Paribas SA, are part of a Swift group working to help develop that service.
BNY Mellon piloted eBAM in 2009 and 2010. Loretta Gannon, the vice president of treasury services planning, strategy and innovation at BNY Mellon, said in an interview Monday that a common digital signature enhances the capabilities of existing technology for banks and their corporate clients.
"We have the standards," Gannon said. "We have the channels on which to communicate, and this identity solution … is actually the piece that is going to make the other two pieces really very robust."
In the pilot planned for June, BNY Mellon will test a software portal that manages corporate client tasks across multiple banks called Central Utility as well as 3SKey with Swiss Reinsurance Co. Ltd. and General Electric Co.
GE has 14,000 accounts through 600 banking relationships, Susan Boeri, its manager of treasury services, said Tuesday at Swift's conference.
GE, of Fairfield, Conn., typically opens 100 accounts and closes 150 accounts per month, Boeri said.
"It's very time-consuming and costly for us," Boeri said, adding that auditing the document trail for its numerous banking relationships is challenging because each bank has a different process.
There is strong interest in digital signature tools that streamline access across accounts, said David Bellinger, the director of payments for the Association of Financial Professionals, a Bethesda, Md., trade group that represents treasurers and other payments execs.
Whether corporations adopt it depends on "how easy will the service be to consume," Bellinger said. "The devil is going to be in the details, and adoption I think is probably going to be slow."
To use the service, a company's bank that is a member of Swift must agree to offer it. Swift member banks distribute tokens to their clients. A corporate client that has a token can then go to its other banks that have also agreed to offer the service to establish the credential to verify identities and sign documents.
"Each individual bank then certifies that particular device based on that relationship with the corporate treasurer," Dignen said.
For banks, a service like 3SKey can also save time and money, Dignen said.
"It actually takes away some of the administrative burden of creating the token distribution," Dignen added.
Every time an employee leaves a company or joins a company and needs account access, a new token needs to be distributed or recalled, depending on the situation.
