The bank connectivity conundrum
Do you ever get frustrated with your bank connectivity? Or with trying to keep up with all the different bank messaging standards? Are you tired of difficult troubleshooting, over-reliance on IT and paying for too many systems?
If so, you’re not alone.
Unfortunately, these problems are all too common in the treasury world. But don’t worry – there are ways to fix them. In this blog post, we’ll take a look at what’s wrong with most companies’ bank connectivity architecture and explain how to make things simpler.
Legacy bank connectivity architecture
Nobody wants to have complicated connectivity architecture. Most treasury teams start with a simple goal: securely move data between your banks and your existing systems. First there’s the challenge of connecting to your banks. Maybe you started with an EBIC, which established connectivity to some of your banks. But, not all of them.
So, you add in SWIFT. You’re now connected to more banks, but…you’re still left manually importing and exporting some bank data through files and logging into bank portals.
Then your company decides to begin adding banks, countries or new PSPs or acquirers like Klarna, Paypal, Zelle, Grab or Adyen. These aren’t supported by your EBICS or SWIFT, so you add another connectivity service bureau into the mix.
Now that you’ve established connectivity, next is standardizing all the different messaging formats . Different bank and country data formats, and each containing different levels of detail. To solve the messaging problem, you add in a middleware or data transformation tool. And then a payment connectivity hub.
But that doesn’t solve all the messaging needs, so your team is still manually accessing bank portals, preparing files by hand and uploading them to a file server.
Now you’re finally ready to deliver standardized bank data into your existing systems. But existing systems often add complexity, too. What happens when you upgrade your ERP? Or when you merge a company that has a totally different ERP and totally different banks?
Sooner or later, treasury teams end up with a tangle of connectivity systems.
4 Key Drawbacks to your Existing Setup
There are 4 key drawbacks of this spaghetti junction of connectivity.
- Siphoning of precious time and budget. Paying for and maintaining so many different systems, enduring never-ending implementations and standardizing and mapping data between systems, never being fully confident that sensitive files are secure when in transit between systems, troubleshooting and finding the source of an issue is nearly impossible, and your team is constantly being trained and retrained on all the systems.
- No single source of truth. You’ve got invoices sitting in a different system than where payments are approved, bank account detail must be setup and configured in multiple systems, you’re reconciling in a system that doesn’t house any payables and receivables accounting data, and your cash forecast is generated in a system that’s disconnected from your invoice, accounting, purchasing and sales information.
- Increased fraud risk. Setups like this are highly vulnerable to fraud – not just because you’re using file-based connectivity which is exposed to internal and external fraud, but fraud vulnerability is increased because there are so many systems storing your data that need to be protected and maintained – so many links in the chain of data custody.
- Still stuck with headaches. Manually importing and exporting data, dozens of logins and passwords to remember, an IT team that needs to maintain user authorization levels in several different systems, a setup that can break in countless different places and time-consuming troubleshooting because you first need to figure out in which system the error actually occurred.
Connectivity architectures like this are expensive, inefficient, and risky. And, they don’t even deliver bank data in real-time — your team is still reliant on the bank to send data on their schedule, not yours.
Replacing Complexity with Simplicity
What if you could – just simply – switch on a single connection between your existing systems and your banks? With the advent of corporate bank API aggregators, now you can. This type of tool provides a single connection for all your banks – a single standardized API connecting all your global banks directly to your internal systems – that takes care of all messaging needs, too.
A truly global bank API aggregator will have all the connections you need pre-integrated for banks and PSPs. No data mapping to different bank messaging formats or standards, no build-out or configuration with the bank, no worrying about file formats or messaging standards like MT, CSV or XML. Bank connectivity made simple.
The benefits of simplified bank connectivity
If you’re like most corporate treasurers, you’re constantly looking for ways to streamline your operations and improve your bottom line. One way to achieve both of these goals is by simplifying your bank connectivity. The benefits of simplified bank connectivity are clear and can help you save time and money.
- Adding new banks or payment types becomes quick & easy
- Expensive, high-maintenance middleware, bank portals and manual file uploads are eliminated
- Fraud risk is significantly reduced because you’ve advanced beyond file-based connections to more-secure API connections and because you’ve reduced the number of links in your data chain of custody
- Reduced reliance on IT
- Fewer systems to maintain
- Free up time and budget to focus on higher value activities
- Access up-to-the-second bank data on-demand, in real time