SAP BCM now communicates directly with Banks
The SAP module known by the acronym MBC enables direct communication between the SAP system and the banks.
SAP BCM (Bank Communication Module) once again lives up to its name by strengthening communication with banks. One of SAP’s pending subjects was to establish direct connectivity, without intermediaries, directly with the banks.
The dependence on a financial messaging provider in the deployment of SAP BCM (SWIFT, Service Bureau, etc.), was always a handicap and opened the door to other types of connectivity models through non-SAP TMSs, such as Kyriba, Sungards, and TIS etc.
SAP, on the other hand, had solutions that enabled connectivity with European messaging networks such as EBICS (exclusively applicable in Germany, France, Austria and Switzerland) or facilitated integration with SWIFT’s Autoclient software (Alliance Lite2).
In the past, it had tried to act as an alternative agent to the Service Bureau, through the SAP FSN (Financial Service Network) solution, but without success, making it dependable on third parties within the SWIFT framework.
SAP BCM now communicates directly with banks
To fill this historical gap, and with the aim of having the End to End process fully integrated into the ERP, SAP has launched the Multi-Bank Connectivity tool, following an agreement reached with SWIFT on 21 March 2018, both joining forces to bring the banking experience to a higher level for treasurers.
SAP Multi-Bank Connectivity is implemented in the SAP Cloud Platform Integration, and the deployment model in S/4HANA on cloud architectures is natively predefined. In the rest of the scenarios, communication must be established through predefined and configurable tools.
The main advantages of SAP Multi-Bank Connectivity are:
- End to End Visibility: Provides the treasurer with visibility of the payment status from the beginning to the end of the process. Integrated traceability is the main feature of the SAP solution.
- Automation: The file and message exchange process is fully automatic and integrated with SAP BCM.
- Global banking platform: A large banking “collective” is created to which new banks will be added.
- Support: Technical support is provided by SAP and by partners specialized in banking connectivity models such as CONVISTA.
- Costs: Cost reduction with respect to the rest of the current alternatives.
- Simplification: The technical architecture is simplified, having everything integrated into your SAP system.
- Standardization of formats: Adaptation and interpretation of different banking schemes.
These are the main advantages provided by SAP Multi-Bank Connectivity, but we believe that some of them need to be further developed.
It is important to highlight that the global banking platform that SAP has created with this solution, (to date approximately 60 integrated banks) means that the process of connecting a company to one of these banks can be carried out in approximately 1-2 days.
What if the bank we are working with is not in the network? SAP will establish the bank connection with that entity, and the deployment time can range from 4-8 days if any SAP customer with Multi-Bank Connectivity has already connected to that entity.
In the case of a completely new entity, the process could take between 2 and 4 weeks.
These connections can be of different natures, but through SAP Multi-Bank Connectivity we will be able to establish the connection:
- Host to Host
- SWIFT Alliance Lite 2
- Combination between Host to Host, SWIFT Alliance Lite 2 and EBICS
In the SAP Multi-Bank Connectivity solution, the costs to be considered would be:
- Network connection costs
- Cost of using the network (number of transactions sent)
- Costs billed directly by SWIFT if this is the connectivity model adopted
Once connected, the platform will allow format conversions to be made and it will interpret different incoming messages, which will update the status of your payments in real time. In addition, it will simplify, in the security framework, the encryption and digital signature of the information exchanged.
These are advantages that currently require a great deal of additional effort for configuration and programming, or the acquisition of third-party software.
Finally, it should be noted that this solution is focused on banking communication, but the objective is that in the future they can give it much more versatility, enabling communication gateways with the different trading agencies (360T, FX Trading, Reuters, Bloomberg, …) for the direct contracting of financial products and their monitoring through the Correspondence Framework of TRM.