This article originally appeared in The Deal and is reprinted here with permission from the publisher.
What were the primary drivers behind BNY Mellon Escrow AdvantageSM, and what challenges does it address?
We recognize the importance of escrow arrangements to the successful completion of business transactions and place great emphasis on providing flexible solutions with rapid turnaround times. Escrow Advantage helps overcome inefficiencies in the onboarding process created by increasing regulatory requirements; helping the transaction to meet the tight turnaround times necessary for this product. This allows us to continue to improve our marketleading suite of escrow and related paying agent services, already supported by our liquid balance sheet, the safety of our strong capital ratios and the ability to keep their escrow property at one of the highest rated financial institutions in the world.
How will BNY Mellon Escrow Advantage reduce the amount of time and effort that clients and law firms spend setting up and managing escrow and paying agent services?
Escrow Advantage offers a state-of-the art technological solution, including accessibility from mobile devices, to initiate the escrow account setup process with ease and increased efficiency. Escrow Advantage allows lawyers and their clients to start the escrow process immediately. Escrow Advantage makes the burdensome Know Your Customer (KYC) process more efficient and helps to eliminate going back and forth on standard KYC questions via interactive rules-based smart forms.
How will this new application make creating an escrow account more secure?
Escrow Advantage operates on an encrypted and secure environment, allowing the exchange of information securely from the law firm or the end client directly into our systems. User authentication protocols ensure that the sensitive KYC information is transmitted securely end-to-end. Escrow Advantage will allow standardized and up-to-date documents to be accessed by the relevant deal parties to further facilitate the client onboarding process.
What feedback have you been hearing from clients in regard to the escrow process?
Law firms and clients who have previewed Escrow Advantage expressed that the interactive smart forms made for a much more efficient KYC process than the past paper form information exchange. Clients and lawyers rated Escrow Advantage as a significant improvement for usability and expressed that they would recommend it to others. Lawyers and other professionals have also expressed that this solution will “greatly reduce the low-value hours that staff spends on escrows.” End user clients have stated that they are impressed with the fact that “all information can be completed earlier in the cycle, helping minimize last minute stress.”
Will BNY Mellon Escrow Advantage streamline all escrow transactions BNY Mellon currently provides through its legacy applications, including mergers and acquisitions, project finance, litigation and indemnification?
Yes, Escrow Advantage will become the front-end solution for all types of escrows on-boarded by our Corporate Trust group, and is flexible enough to accommodate new types of escrows in the future. This complements our current strategy of having a dedicated escrow services team. Our professionals and their support teams are experienced in servicing different types of escrow property, at varying levels of complexity. As a result, clients are free to concentrate on other strategic objectives. Escrow Advantage will allow our clients to benefit from our integrated service structure, combine escrow agency with our custody and investment services, and enable all parties to better manage their assets and deposits.
How does BNY Mellon intend to balance the automation delivered with the product with your more typical hands-on, client-facing approach?
Escrow Advantage is not a substitute for our standard approach of providing clients with high-quality personal touch. Our dedicated escrow services team, with deep knowledge and proven expertise will continue to provide personalized, customized solutions for our clients. Acting as a neutral intermediary between the parties to the escrow arrangement, we will work closely with our clients to help them achieve their goals. Escrow Advantage is a tool intended to enhance our ability to provide a high-quality initial interface for onboarding new escrow opportunities. The smart form is an extension of our best practices and it will allow us the ability to do this 24/7 and on mobile devices for registered Escrow Advantage platform users.
Will BNY Mellon Escrow Advantage provide more visibility into the escrow process for clients and allow stakeholders better ease of access at each step?
Escrow Advantage will help create market discipline and an improved market practice. Our clients will start to develop expertise into our practice and will experience a better onboarding process. The Escrow Advantage interactive smart form provides real-time vetting of the sufficiency of the information entered at each step of the process, allowing for a more streamlined delivery of threshold information necessary for establishing an escrow account.
What is so important about the KYC phase of the process?
As a responsible Globally Significant Financial Institution and the preeminent provider of solutions to the international capital markets, who we do business with is of the utmost importance. At the same time, we are mindful of the urgency this product demands. Client onboarding with enhanced KYC is a crucial part of this process. The market may perceive this process as nuanced and a divergence from the transaction’s strategic objective. This is where the delays can occur and where most of the complaints have come from to date.
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