Over recent years, the banking community has made steady progress toward establishing standardized billing formats.
HawkeyeBSB, a SaaS based platform developed by Redbridge Analytics, is the industry’s next generation of bank fee monitoring software. Since its debut in late 2016, HawkeyeBSB has analyzed over 1700 standardized invoice formats, such as EDI, Twist version 3.1 and Camt.086. The complexity of analyzing these invoices – issued by 12 global banks and for accounts in 70 different countries – provides many lessons regarding the amount of progress still required for bank billing statements to be considered as having reached a satisfactory level of data standardization.
Over recent years, the banking community has made steady progress toward establishing standardized billing formats. Banks in the US primarily use an older standardized format, referred to as EDI (Electronic Data Interchange), for clients’ US accounts. Outside the US, the format used is dependent upon the date a bank began providing identical invoices to international clients. Early adopters, most of which are UK based banks, issue invoices in the first internationally published format – Twist BSB version 3.1. Most recently, banks in mainland Europe began embracing the Bank Services Billing (BSB) initiative with the latest published standard – ISO Camt.086.
Redbridge Analytics highlights material differences in the quality of data in bank invoices, not only among different banks but also within the same bank, depending on the geographical area in question. For example, the leading US cash management banks do not include in their billing files the international IBAN (International Bank Account Number) or the national BBAN (Basic Bank Account Number) identifiers. Rather, the banks only provide an internal reference number for each account. Doing so deprives clients the ability to easily identify to which entity the invoice must be allocated. The exclusion of the information is even more puzzling since banks store account numbers in their systems using the international IBAN in order to facilitate international transfers!
Making matters worse, while some banks invoice and charge for fees according to the calendar month, other banks invoice in different intervals, thereby creating reconciliation challenges. If, for example, the client is billed on a weekly basis, or perhaps on a monthly basis on the day on which the account was originally opened (i.e. the 21st of the month), treasury groups simply cannot verify the volume amount stated on the invoice.
Lastly, global banks do not provide the same level of data quality for countries where they are located, as they are not always able to produce standardized billing files in every country. When able to do so, banks remain dependent upon the quality of the billing chain of the local entity. For example, in the 1990s, several European banks grew through acquisitions in Eastern Europe, yet those banks still have not harmonized local billing systems, thereby leading to code errors on certain transactions. The good news is that clients are complaining, and banks have been responding by advancing quickly; such errors should begin to decline gradually.
For more information about the adoption of the standardized bank invoice, we invite you to read the BSB newsletter, published by treasurers, bankers, software developers and standard setters, to which Redbridge regularly contributes. The newsletter can be viewed by clicking on the link below:
For more information about the bank invoice analysis and verification tool, please visit www.redbridgeanalytics.com