In today’s interconnected and technology-driven economy, corporate clients increasingly need access to rapid solutions of communication and real-time datasets provided by their banks.
But achieving these two things takes time and effort. Firstly, corporate clients must implement intelligent processes and integrate their enterprise resource planning (ERP) systems with banking workflows.
This will then automate and streamline finance and treasury processes, enabling smoother data transfers between banks and corporate clients. At the same time, this technological shift allows banks to deliver financial services at the point of need. So, it’s a win-win scenario for both the bank and the corporate client.
A digitization shift
In the past, companies started to invest to integrate their ERP platforms and software tools with the core banking system to access GCB services offered by corporate banks.
However, many businesses require even more real-time data and information from their banks. And, as a result, the entire banking ecosystem must digitally transform to meet the changing needs of corporate clients.
For this to happen, banks need to accelerate their digital transformation plans and add new technological capabilities to their IT infrastructure. They include connectivity through application programming interfaces (APIs) and integrations with corporate IT applications, including ERP and TMS.
NTT DATA is helping multiple banks to develop their API catalogue, enabling corporate clients access to an entire range of bank APIs and find the one that best suits the client need. This allows banks to share and consume information directly from their client´s ERP.
NTT DATA makes it easy for his clients to identify and prioritise their corporate banking APIs and API development.
NTT DATA believes that these capabilities present massive opportunities for banks and their corporate clients. For banks, they can use API and ERP integrations to obtain real-time information from buyers and suppliers. This data can help them make faster and more accurate decisions.
Taking steps to enable better connectivity and straight-through processing across diverse platforms can also improve integration between banking and ERP systems. Additionally, such capabilities mean corporate clients don’t need to log into multiple platforms for accessing different banking services. Instead, they can manage all transactions from a single internal environment.
As a result, corporate clients benefit from time savings and up-to-date financial data. Another advantage of API and ERP integrations for corporate banking clients is improved security and increased visibility over their financial system.
Taking a new approach with APIs
The benefits of increased integration between corporate banking and client IT systems are enormous. But what’s the best approach to realise these? At NTT DATA, we believe that there are two distinct patterns for an integration scenario: add-on and open APIs.
Both can help banks to provide a wider range of alternatives to their clients and partners, although there are different advantages and challenges between the two. And banks and corporate clients need to be aware of these when choosing an effective data transfer solution.
The API model is worth considering because it can offer a better digital experience for banking corporate clients. APIs are also highly flexible and customisable, allowing organizations to set up agile and efficient third-party connections within a secure environment. Doing this is relatively easy, thanks to practical and detailed documentation.
Using APIs, banks can connect their services with corporate client ERP systems to streamline existing processes, automate operations and eliminate obstacles faced by corporate clients. What’s more, companies that rely on different corporate banking services can then access them wherever and whenever required. This helps to improve corporate client’s confidence in, and satisfaction with, corporate banks.
APIs are often easier to integrate and have faster onboarding processes than other data exchange methods. They also offer standardized communication and lower maintenance costs for banks. But arguably, their most significant benefit is that they allow users to access an uninterrupted, real-time flow of banking and financial information.
Based on NTT DATA experience with his clients, APIs aren’t always the right data transfer solution for banks and corporate clients. Although APIs can provide an independent layer to ERP system layers, they require corporate clients to adapt their own systems and create extract processes that work with their bank’s API and IT requirements. Clients need to side aside significant time and investment for this.
Add-ons: pros and cons
But for banks and businesses that require an alternative means of exchanging data with each other, add-ons could be more a more viable choice. What sets them apart from banking APIs is that they’re designed based on the bank’s best practices.
With add-ons, banks also have complete control over the budgets and timeframes needed to develop them. In terms of other benefits, add-ons are easier to bring to market and aren’t limited to a single channel.
There are some downsides to banking add-ons, though. The first is that banks need to develop a dedicated add-on for every ERP and release, which can take up a lot of time and require specialist IT knowledge.
While corporate clients only need a simple adoption process within their ERP system for add-ons to work, it’s necessary to perform a new database update every time a new version of the add-on is released. This will allow clients to follow the evolution of updates, but it still requires effort and can therefore be an unnecessary nuisance.
Often, add-ons are more expensive for banks to implement and maintain. Moreover, some banking corporate clients may not want third-party parts in their ERP system and subsequently refuse to use add-ons.
At NTT DATA we conclude that today, most corporate banking clients use a range of financial services. And in order to keep track and make sense of the information that comes from these different sources, they require a real-time flow of financial data that exists in a single environment.
Luckily, APIs and add-ons make it easier and quicker to integrate banking systems with corporate client ERP platforms so that financial data is all in one place. But what’s clear is that APIs and add-ons have their own pros and cons. And in order to choose the right data transfer mechanism for your organisation, researching the differences between APIs and add-ons is essential. NTT DATA can support you on this new challenge and in identifying the best solution for you.