Building and Implementing Seamless Payment Processes
by Mikael Kepp, Chief Expert, CM partner bank and Vendor management relationship, Nordea
The adoption of financial technology and faster, more agile e-systems in banking has had profound implications in corporate finance. It is becoming increasingly rare to find a corporate financial process that has not been digitised.
At Nordea, we are committed to offering digital banking solutions that make life easier for our customers, whether that is an e-banking platform or cash-forecasting tools. We know that the quality of our online and integrated host-to-host (H2H) solutions is important — after all, 86% of finance professionals say the capabilities of a bank’s technology platform is an important factor when choosing a banking partner — but we know that this alone is not enough.
End-to-end automation is the goal
No business has just one system, and business processes often succeed or fail depending on how well multiple systems are integrated. You expect your transactions and file transfers to be processed seamlessly, in real time and without error, from your treasury management system (TMS) or enterprise resource planning (ERP) system to your banking partners, customers and suppliers, via messaging standards. Below, you will find an example of an IT-system portfolio and how a long range of systems and processes are integrated and interlinked.
Integration is needed for a range of processes including account payables and account receivables, payroll, invoicing, expense management and payment reconciliation, so staff can use their regular systems to execute tasks. Your staff want to be able to do this without having to visit your bank’s online portal or using a dedicated bank-supplied app. When your systems are fully integrated, you save time, save money, avoid errors, and can focus staff on optimising other processes.
Your bank needs to be prepared for the future
Given that integration is so important to the smooth functioning of so many financial processes, it is vital that your bank is up to speed with the latest regulations and standards for data formats and messaging. These include ISO20022XML, SWIFT, and SEPA — all of which aim to make it easier to exchange financial data without manual intervention.
To ensure smooth integration of systems and to give you the choice of best-suited communication formats, your bank should be working closely with both global and domestic software-vendors of ERP, TMS and other services. Banks should also collaborate with other types of vendors within system-implementation, bank-communication and file-conversion services - so that your specific needs and requirements can be best met.
But even if you, your bank and your vendors have a close working relationship, you should not underestimate the work involved.
One size does not fit all
Every ERP implementation and every corporate financial process has its own quirks and idiosyncrasies. As a result, you will know that the introduction of new, state-of-the-art systems can be a significant undertaking.
Integration can become problematic if your partners promise unrealistic timescales — especially as missed deadlines typically result in project cost overruns. At Nordea, we take the commitments we make to customers very seriously.
Medical device manufacturer GN ReSound is a good example. At its German business unit, the introduction of SEPA meant it needed to reengineer its ERP systems and financial processes. GN ReSound Germany is a big user of direct debit, which allows it to reliably collect small payments from thousands of individual stores across the country.