Extending the EBICS Value Proposition
by Andrej Ankerst, Head of Cash Management, Germany & Austria and Steven Lenaerts, Head of Product Management Global Channels, BNP Paribas
One of the most significant industry changes that has taken place in payments and cash management over the past decade is the introduction of the Single Euro Payments Area (SEPA), replacing domestic credit transfers and direct debits with consistent payment instruments and formats for both domestic and cross-border euro transactions across the Eurozone. With migration now complete, treasurers are able to leverage the opportunity to harmonise payment and collection processes, formats and infrastructure, both in Europe and beyond. Treasurers in Germany in particular face a dilemma: how do they supplement their existing domestic payments protocol, EBICS, to facilitate efficient payments in other markets, or is there an opportunity to leverage this protocol to support their international business strategy?
A catalyst for payments transformation
Although SEPA payment instruments are now well-established, most companies in Germany migrated to SEPA on an ‘as is’ basis, i.e., without changing their business processes or organisational structures. Now that these payment instruments and formats are bedded down, treasurers and finance managers are seeking to centralise, rationalise and harmonise payment and collection processes, bank account structures and communication channels. Furthermore, as ISO 20022 formats, on which SEPA formats are based, are widely recognised as a global standard, treasurers are able to achieve efficient payment and information flows beyond the Eurozone and across their geographic footprint.
The nature of these centralisation and optimisation projects differs across enterprises; however, whether companies are centralising payments through a payments factory or SSC, building a regional or global treasury centre, or optimising existing processes and organisational structures, an efficient, robust and secure bank communication platform is essential. The challenge for treasurers is not the lack of choice, as there is a range of opportunities available, from SWIFT through to banks’ web-based or host-to-host platforms. However, in many cases, these solutions would be additional to the payments protocol already in use for domestic payments and information flows in Germany.
The value of EBICS
Most companies in Germany are already accustomed to using EBICS (Electronic Banking Internet Communication Standard), the industry standard for bank communication in Germany, for domestic payments. In particular, treasurers are attracted to the high levels of security that EBICS offers, the ability to standardise payment and information flows through a trusted infrastructure and consistent formats, and the close integration of EBICS into treasury management systems (TMS) that are widely used in Germany, such as Hanse Orga and BELLIN. Many treasurers and finance managers are reluctant to replace this protocol with an international alternative; similarly, it is not cost- or resource-effective to use EBICS for domestic accounts, and implement another solution for accounts maintained in other markets. Consequently, many treasurers in Germany are looking to understand how they can extend the value of EBICS to manage payments and information flows outside Germany.
Local solution, global advantage
As a major cash management bank in Germany, committed to supporting our customers’ payments and cash management requirements both within Germany and internationally, BNP Paribas pioneered the concept of ‘Global EBICS’ in response to this demand. This solution extends the use of EBICS across our entire network, providing customers with the same convenience, security and standardisation across their cash management business globally, wherever in the world they do business with BNP Paribas. Furthermore, customers can take advantage of the integration with their TMS that they already enjoy.