Santander joins SAP MBC to integrate financial data into processes

SAP has extended the SAP Multi-Bank Connectivity system with the addition of Santander Bank.

The Spain-based global banking giant is the first European bank to become part of the SAP MBC system, a cloud-based service that connects businesses with their banking partners so they can integrate financial transactions, like credit approvals. payment, directly in the business process.

Analysts noted that SAP MBC – which launched in 2020 and works with SAP ECC 6.0 and later, S/4HANA on-premises and S/4HANA Cloud – does nothing new with enabling e-commerce capabilities. The competitive landscape is robust, but it offers attractive banking integration capabilities, especially with SAP systems and modules.

According to José Luis Calderón, head of global banking transactions at Santander CIB, Santander wanted to make it easier for corporate clients to access the bank’s financial products.

“Removing the complexity of connectivity will improve the bank’s relationship with our corporate customers,” he said. “This allows us to reduce the time and cost of these processes, so we will be able to support growth and customer banking needs.”

Integrated connectivity will enable global transaction banking products, including payment and working capital applications such as supply chain finance and sustainability finance, he said.

“A corporate banking portal is not enough for us in our digitization strategy,” Calderón said. “And we will use our specific products, expertise, data and analytics to give [value-added] knowledge.”

Integrated transactions where decisions are made

SAP has seen an increase in demand from banks who want integrated ways to connect with their corporate customers, according to Falk Rieker, SAP global head of IBU Bank.

“There has been a fundamental shift in thinking over the past two or three years as banks understand that their own channels are no longer sufficient in the digital economy,” Rieker said. “They must be present in new ecosystems. They must be present in marketplaces. They must be present where the customer makes the decisions.”

The idea is to bring services that have been available to consumers for some time in B2B transactions and finance, he said. For example, while it is easy for consumers to immediately obtain a payment plan or loan when purchasing goods, this is not common for B2B transactions.

“We’re seeing these kinds of things more and more in corporate banking, which we call integrated financial services, where banks’ financial services are integrated into the business process of companies,” Rieker said.

SAP MBC supports the Society for Worldwide Interbank Financial Telecommunications (SWIFT) global e-banking standard and digitizes the process businesses must go through to connect to financial institutions, according to Rieker.

This type of integration is usually cumbersome and tedious, as each institution has its own system and data format. MBC standardizes the process, making it easier for customers to onboard or switch banks, he said.

In addition to Santander, more than 200 banks, including CitiGroup, are MBC partners, and thousands of corporate customers use the service, he said.

MBC nothing new, but useful

There’s nothing particularly new about SAP MBC, as modern treasury management systems (TMS) have been processing transactions in the background for years, according to Predrag Jakovljevic, analyst for Technology Evaluation Centers.

Most banks integrate with SWIFT and third-party data exchange systems, which are available through the modern TMS, Jakovljevic said, and data integration has moved from batch to near real-time for decades. He cited Fiserv as an example of a service provider doing it well.

“It seems to me that SAP is just playing catch-up rather than doing something unique,” he said. However, he noted that the internal integration between MBC and other SAP modules was interesting.

Banks like Santander are joining MBC because of the service’s strong capabilities to securely integrate financial services into a single app. But customers should also consider the many startups, according to Ray Wang, principal analyst and founder of Constellation Research.

One example is Bond, a platform for integrating credit applications, he said.

“Most banks are worried about creating another dependency on SAP, so they’re on the fence about MBC,” he said. “That’s why there hasn’t been as rapid an adoption as SAP might have expected.”

Jim O’Donnell is a TechTarget Senior Writer covering ERP and other enterprise applications for TechTarget Editorial.

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