Real-time Bank Data Doesn’t Mean More Frequent Bank Statements

FinLync | June 3, 2022

You work in treasury and it’s 10:00 AM: do you know what your bank balances are? 

A simple question, but unfortunately, it may not have as simple an answer. In fact, pursuing this most basic question – what are our numbers? – can take two fundamental paths, one traditional and time-consuming, and the other, modern, efficient, and fast. 

Let’s begin with the more familiar option, the traditional means of acquiring balance data: the bank statement. These are made available through host-to-host file transfers coordinated between your treasury and the bank, usually along an established schedule negotiated by the two parties. 

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Under the file exchange format, treasuries can get complete bank statements that reveal the entirety of your account’s status, or more frequent updates of incremental developments reflecting activity since the last comprehensive statement. The former statements may arrive twice a day, perhaps morning and afternoon; the incremental reports may be scheduled more frequently, upwards of every half-hour, but typically every one or two hours. 

The problem of TIME 

When it comes to data, time means decay. The more time that has elapsed since the previous report, the less accurate the data is likely to be and the less confidence treasury has in its precision.  

It would be wonderful if banks could automatically submit updates as activity occurs, but bank systems are not constructed that way. When the balances change, no one in treasury knows until the next statement arrives. 

As a consequence, the prudent treasurer cannot accept statement data at face value but must confirm positions by visiting individual bank portals.  

Further, banks are not the only party with systems issues. Your own treasury may depend on middleware to integrate incoming bank data with your internal systems. But sometimes, incoming bank statements can be held up within the middleware, interrupting the chronological sequence of statements, opening the unfortunate possibility of mistakenly accessing an older statement, rather than the most up to date. 

In sum, not only do treasurers need to wait on statements from multiple banks and hope that they are referencing the latest ones, but they have to spend additional time assembling incremental statements and confirming data through portals, often with a heavy reliance on IT resourcing. 

If this sounds unnecessarily complex, you’re right. And complexity, like time, introduces more opportunity for error. 

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Make it simple: real-time data via bank APIs 

The alternative to file transfers is the API, a computing protocol that enables secure, immediate data exchanges among systems.  

The alternative to the bank statement is real-time bank data, in which the available data is consistently up to date. 

Best of all, the alternative to scheduling exchanges, retrieving statements, and confirming with portals is… 

Press a button. 

Seriously. That’s it. When you communicate to your banks via secure APIs, you can retrieve timely balances and other bank data with literally the press of one digital button. 

If you want to know your current balances, hit the button. 

If you want to know the status of your transfers, hit the button. 

Want to know about fees, rates, processes, accounts and so on and so on, you know what to do: hit that button. 

Getting that efficient bank API magic 

Bank APIs sound good because they are good; they enable the real-time data access contemporary treasuries need to be efficient and effective.  But some are skeptical that bank APIs are truly, finally a viable option or if the old treasury adage of “the banks just aren’t there yet” remains true.  

In reality, there are more than 80+ corporate bank APIs available today and the number is growing rapidly thanks to Open Banking regulations.  Banks offering corporate APIs include household names like HSBC, Citibank, Deutsche Bank, Standard Chartered, Barclays and JPMorgan, as well as boutique and regional banks like U.S. Bank, Raiffeisen Bank, and BNP Paribas. You can search the full directory of live bank APIs in the FinLync Bank API Catalog.  These bank APIs are already being used today by forward-thinking treasury teams at Walmart, Citrix and Rimowa, among others. 

Banks and thought leaders in corporate finance agree that bank APIs are where bank connectivity is going, and those that adopt real-time bank data stand to benefit from a significant edge over the competition. 

Essential Guide to Bank APIs