Banks in 2020: A Payments Integration Renovation

For banks to succeed with a growing base of corporate clients they have to be ready for the complexity of different compliance rules, new protocols and the fact that every new payment may bring with it a different problem that has to be solved.

Many challenger, FinTech and tier three banks have seen unprecedented growth over the last few years. As they grow, these banks, many of which are considered predominantly retail banks, are attracting a larger and more diverse corporate client base. Some of them are born-in-the-cloud, most offer modern, attractive services with low transaction fees, and they are bidding up against large and even very large banks for the corporate business. I have noticed that the problem these smaller banks commonly experience is that they are not really built to handle corporate clients, particularly when it comes to payments. Even banks that are able to process corporate payments can become overwhelmed when the quantity, type and complexity of payments grows and becomes difficult to manage.

As an example, when requests come into a bank for international payment processing services, the payment files are received and processed by the bank. In order to process the payments, the bank’s IT team has significant work to do behind the scenes, applying business rules to the files, and converting the files to the correct file formats. In Europe there are a large number of incoming payment message and file formats and connectivity methods, from Secure File Transfer Protocol (SFTP) to the Electronic Banking Internet Communication Standard (EBICS) in Germany and France, to native domestic country-specific payment formats, to SWIFT, to legacy standards like CODA and BACS, to ISO 20022, and the list goes on.

In order to manage and support the growing number of file formats and connectivity methods, banks often have to allocate additional and unplanned IT resources, which can be costly. In addition to having to hire programmers, these banks also have a new, complex series of data flows, which, if they aren’t prepared for, can compromise service levels and the overall customer experience. Not having IT capacity to handle the business can hinder sales and stifle business growth. This all adds up to inefficiency, added expense, and can even lead to lost revenue. For these banks to succeed with a growing base of corporate clients they have to be ready for the complexity of different compliance rules, new protocols and the fact that every new payment may bring with it a different problem that has to be solved.

With our Payments Integration Hub solution we can help banks that are experiencing these issues. By putting flows into place that accept payments with any file type and many connectivity methods, we add the necessary agility to handle corporate payments. Once a payment file is received, our solution validates the format, then moves forward with a canonical format, and processes the payment instruction, making it available to the bank’s back-end system(s). SEEBURGER’s Payments Integration Hub solution can run on any cloud, or on premise.

There is powerful client onboarding functionality included with the solution that streamlines the onboarding of corporate customers and validates incoming payment formats that can be managed and processed by the bank. The onboarding functionality supports provisioning and change management for existing clients while offering self-service onboarding tasks to make the process smoother and less time-intensive. In my experience onboarding is one of the areas in which most banks could use some efficiencies.

The solution also manages the distribution of intraday and end-of-day account position and balance transaction reports to corporate clients, and on request we can extend the processing flow offering compliance, risk mitigation, backend integration and payment reconciliation.

If you’d like to discuss how the SEEBURGER Payments Integration Hub solution can help you improve client onboarding, translate payments data and integrate to improve your payments capability, contact us today.