What is the Virtual Account Solution?

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What is the Virtual Accounts Solution (VAS) is a specialized banking platform designed to empower Bermuda-regulated corporate clients across various industries with secure and efficient customer fund management. Think of it as a sophisticated fund segregation and management system that ensures customer money is properly isolated, tracked, and controlled while maintaining full regulatory compliance.

Core Architecture - The Account Hierarchy

The CMS operates on a hierarchical account structure that creates clear boundaries and control points for fund management. Here's how this multi-layered system works:

• Settlement Accounts sit at the top level, serving as the main operational accounts for corporate clients. These accounts interface with external counterparties and handle the primary fund flows into and out of the VAS ecosystem.
• Parent Accounts function as intermediate control points, grouping and organizing multiple customer accounts under logical business units. Think of these as departmental or regional organizing structures that allow corporate clients to manage different segments of their business separately.
• Sub Accounts represent individual customer accounts within the system. Each sub account is linked to a specific customer and stores their segregated funds. These accounts ensure that customer money remains isolated and protected from unauthorized use.

This hierarchical structure creates a clear chain of custody for funds, enabling detailed tracking and control at every level while maintaining the segregation required for regulatory compliance.

Key Features and Capabilities

• Parent-Child Account Structure enables corporate clients to create and manage multiple virtual child accounts (sub accounts) to store customer money in individual segregated accounts. This structure provides the granular control needed for complex fund management scenarios.
• Risk-Based Reliance Model implements a rigorous risk-based approach for Know Your Customer (KYC) and Customer Due Diligence (CDD) processes specifically for blue-chip, Bermuda-based regulated corporate clients.
• API Integration facilitates seamless integration, automating settlement processes and transactions. This integration capability eliminates manual processes and reduces operational risk while improving efficiency.
• Automated Transactions streamlines and automates authorization for customer debit and credit requests, deposits, withdrawals, and transaction reversals for efficient fund management. The system can handle complex transaction flows automatically while maintaining proper approvals and controls.
• Real-Time Visibility provides you with transparency and control over their funds, preventing unauthorized use while enabling smooth transaction execution. Corporate clients can monitor fund movements and account balances in real-time through their integrated systems.

Key steps in virtual accounts

1. Client Onboarding
   Initiated via the client’s Relationship Manager. Clients undergo a due diligence process. Only Bermuda Monetary Authority (BMA)-regulated clients are currently eligible.

2. Account Setup
   Upon approval and signed terms, BCB provisions:

   • A Settlement Account (external-facing)
   • A Parent Account (internal intermediary)

3. API Integration
   Clients register via the BCB Developer Portal, obtain API keys, and configure their internal systems.

4. Virtual Account Creation
   Clients can create one Virtual Account per end-customer. Each is assigned a unique account number, enabling transaction tracking and segregation.

5. Fund Movements via API
   Transaction types include:

   • External Payments
     • Withdrawal Transfer: Sub account → customer's external bank account (must be in same customer name)
     • Settlement Transfer: Master Settlement Account → third-party counterparty to settle transaction on behalf of customer
   • Internal Transfers
     • Credit Transfer: Master Settlement → Master Parent → Virtual Account
     • Debit Transfer: Virtual Account → Master Parent → Master Settlement
   • Reversals
     • Reject incoming SWIFT funds not aligned with customer name/whitelist rules

6. Reporting Ability to retrieve individual account or transaction details, list all accounts or list all transaction:

Account Structure