Modern corporate clients have several needs while working with banks. Business owners require faster access to communication solutions and real-time statistics to gain a competitive advantage in a technology-driven economy. However, it takes time and effort to achieve these goals. Businesses must link their enterprise resource planning (ERP) systems with banking workflows.
Due to banking connectivity solutions, finance and treasury operations will be simplified, allowing for more seamless data exchanges between banks and commercial companies. What’s more, such an innovation enables banks to provide financial services right where they are needed. Therefore, both parties get significant benefits for their further development.
Types of Bank Connectivity
Modern banking systems provide access to different bank connectivity types, including:
- H2H (Host-to-Host). This network protocol is designed to transfer and control data on a distant server. This system consists of a cloud-based shared folder which both parties may access. Banks give their clients this access so that they may share payment instructions and study reporting files.
- SWIFT. This option allows businesses to connect with over 11,000 financial institutions across hundreds of countries. This technology is trusted because it ensures high security and is a single gateway.
- Open banking APIs. It’s one of the best practices among the most modern connectivity technologies. Such a method introduces new opportunities, like accessing real-time balances from banks. Before APIs, businesses had to perform batch payments, but now this may be done instantly whenever a payment is required without tough reconciliation.
- EBICS. It’s a German technology that has taken the place of a more traditional banking connectivity, known as BCS-FTAM. The German banks wanted to establish a reliable and affordable means of communication for money transfers. Since the standard has been made public, anybody can create their own EBICS server.
Besides modern technologies, there are more traditional alternatives, including standard messaging formats.
Benefits of Bank Connectivity
Bank connectivity brings the following benefits:
- Efficiency. Thanks to digital banking connectivity, companies may automate all the processing, such as payments and conciliation. Besides the fact that there’s no need for manual monitoring, this helps save money and time on such processes. It decreases the risk of improper payments that can be harmful to companies. All the actions are carried out automatically, increasing accuracy and decreasing risks of the wrong decision-making. As a result, businesses may increase their efficiency and concentrate on their primary goals.
- Centralization. Bank connectivity makes it easier to manage financial transactions by allowing entrepreneurs to access financial data in one place. Businesses with several bank accounts consider this aspect the most significant. Instead of opening each account separately for proper cash management, customers can access their financial information in one place.
- Complete safety. To ensure better protection of financial data and reduce the risk of fraud, advanced security methods, such as multi-factor authentication, are implemented. Bank connectivity increases a company’s data privacy by removing the need for manual information entry. Due to automation, authentication is getting better. Since financial fraud and cyber risks are common, companies access improved tools for controlling their transactions with complete security.
These benefits are ensured only while partnering with professionals. Experts from Thales Capital know all the details about banking regulations. To achieve your goals with the highest productivity, contact them:
Phone: +35220334030
Email: structuring@thales.lu
Address: 2 Place de Strasbourg L-2562 Luxembourg
Challenges of Bank Connectivity
Although bank connectivity ensures business success, its different types have their nuances. For example, direct SWIFT connections are expensive, time-consuming, and resource-intensive to integrate. Furthermore, companies must fully abide by the SWIFT Customer Security Programme (CSP), which says that all of its participants secure their endpoint because they must safeguard their network.
There is also a concern about EBICS. It has several versions for different countries. So, businesses must remember this aspect, especially if they work internationally.
Summary
All in all, banks provide a variety of connection solutions to both huge corporations and local businesses. While these connectivity channels allow these clients to automate their payment processes, it can be difficult to ensure that everything is done properly and securely. To make integration successful, it’s better to work with the experts who know how to improve customer experience.
