A new standard is in the works for the messages that banks useto report cash management information to corporate treasuries, andaccording to a recent survey of finance executives, that newstandard can't arrive too soon.

Messages about things like bank account balances, lockboxservices and controlled disbursements currently use a BankAdministration Institute (BAI) format that was last updated in1987. In the more than two decades since then, banks have respondedto changes in the services they offer by independently adjustingthe messaging format, forcing treasuries to make alterations totheir workstations and other technology to deal with the variationsin the messages from different banks.

Eighty-four percent of the more than 1,100 finance professionalssurveyed by the Association for Financial Professionals say theywant the BAI format to be standardized across all banks, and 44%would also like to see the tags standardized and the informationmade readable by both machines and humans.

The BAI format “really is not a standard anymore because overtime the banks customized,” says David Bellinger, AFP's director ofpayments. “The cost to maintain it, the headaches involved in justdealing with the differences among the banks, got to be prettylarge. The pain has reached a point on both the bank and thecorporate side that folks have gotten together to create a uniformstandard.”

Last fall, Accredited Standards Committee X9 (ASC X9) announcedthat it was beginning work on a new standard that would incorporatebest practices and codes from both the BAI format and ISO 20022,the international standard for such messages. Members of thecommittee working on the new standard include major cash managementsuch as Bank of America, Bank of New York Mellon, Citi, JP Morganand Wells Fargo, as well as the Federal Reserve and SWIFT.

Cindy Fuller, executive director of ASC X9, says the proposedstandard is almost ready for the next step, a voting process thattakes 4 to 4 1/2 months. “The balloting process could start asearly as September,” Fuller says, which suggests the final standardwill be ready early next year.

From a corporate standpoint, the key is probably the amount oftime it takes banks to adopt the standard. Fuller says that whilethere's no timeline for adoption, “clearly the banks are supportingthis and the banks are possibly even making changes now.

“Each bank will take a look at how their corporate customersbenefit from these changes and will do adoption on that basis androll it out in a timeframe that's appropriate,” she adds.

“Larger banks will probably move on it pretty quickly,” saysNancy Atkinson, a senior analyst at Aite Group, a financialservices research firm in Boston, “especially if their largecorporates are demanding it.”

The effort benefits banks as well as their customers, Atkinsonnotes, because moving to a standard format from the jerry-riggedmessaging that they have been using should help banks automatetheir processes. On the downside, once messaging is standardized,corporates can switch banks more easily, she says.