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BofA’s new tool VAM to aid in the growth of corporate cash management

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BofA’s new tool VAM to aid in the growth of corporate cash management

BofA’s new tool VAM to aid in the growth of corporate cash management

On Tuesday, sources reported that the clientele based in America is said to receive a new cash management tool to help earn prize share from the massive $300 billion monetary management business for the world-class corporations stationed overseas. This tool is an initiative taken by the BofA—Bank of America (BAC.N). The bank is fairly influential, so it is necessary for it to make business moves that are good for the market and the corporations which are dependent on it; to live up to the title the bank received in 2021. It bagged the top ranking, rightfully so, for Retail Banking Advice.
Transaction banking, in the simplest terms, is a set of banking services that facilitate the secure transition from one country to another. They offer a variety of exclusive services, namely, risk management, liquidity or cash flow management assistance to address a few. They also have security services that aid in the overall improvement in relationships between its customers; for those partnered with it and act as a safety portal for banking institutions.

Virtual Account Management (VAM) is an electronically based platform that helps corporates create, monitor, and manage virtual accounting much better. It sanctions the segregation of activity and transactions under one centralized bank account while retaining the transparency and reviewing needed to ease reconciliation and internal accounting.
In the simplest terms, it is an online ledger. This tool, apart from its broad range of purposes, can be activated and ready to use within a 24 hours bracket, unlike a physical bank account which can take several days or weeks to run upon request.
Physical banking services also have drawn out protocols and procedures that can be frustrating to some, meanwhile, VAM takes a matter of moments to get you started and keep a reign on all the transactional proceedings from that moment forth. Sure, it may have its share of downsides as well, but ultimately there isn’t a system developed currently that can achieve the same results.
It is a crucial system that holds large beneficial values in Europe, run by the second-largest American bank, which is said to be extended to the United States soon. VAM is not entirely new to the field, but the pandemic has certainly accelerated its necessities and acceptance.
Liba Saiovici, the head of Global Receivables in the worldwide transaction services department for the BofA, had emphasized the importance of this feature in cases where U.S. companies require this since they are known to maintain hundreds of separate bank accounts to compartmentalize funds generated by their clients, partners or subsidiaries.
Salovici also commented on how VAM is a cost-effect feature in comparison to the current U.S. system, which employs hundreds of people to manage the accounts. It is for certain that their clients are expanding, but the treasury teams under them are not paced similarly when it comes to growth.
Earlier this month, Chief Executive Jane Fraser had stated that transaction banking is a business with a competitive but still scattered nature. The sector’s largest global bank commands a ballpark estimate of 10% of the market. It is a service that requires a stream of continuous investments to thrive, clearly there is bound to be a competitive aspect to it.
Conclusively—devastating recent disasters like the pandemic, the Ukraine war, inflation, and other sources may have given the U.S. economy a reboot, but VAM may help it bounce back after the forecasted recession set to air this year. Virtual banking is a preferred method among several generations now, so to extend this feature outside of Europe would be a smart move even if it doesn’t immediately ascend to greater heights.
Morgan Stanley analyst Betsy Graseck commented that efficiency, marketing, and weighty investment are the trusted methods to gain market value in this field.

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