Joy Macknight

Santander CIB is exploring how a common data format for corporate-to-bank connectivity can be leveraged to create “invisible” corporate banking solutions, as well as value-added services in the sustainability space.

Standardised corporate-to-bank enterprise resource planning (ERP) connectivity could solve many a headache for corporate treasurers. No longer would they have to expend effort and time in tailoring file formats to each bank’s proprietary data structures. Instead, onboarding would become a more streamlined and faster process, and switching banks would be a breeze.

While the potential upsides for corporates are clear, the ability to quickly switch could be seen as a threat for banks, who previously thought that a cumbersome process created customer ‘stickiness’ – e.g. customers stuck with their incumbent banking relationship because it was too much of a hassle to start a new one.

However, this old-school mindset has changed over the past 18-24 months, according to Falk Rieker, global vice-president and international business unit head for banking at SAP, fostered by the advent of cloud and application programming interfaces, as well as the rise of platform business models. Corporate banks now want to make it as simple as possible for customers to consume their banking services.

“There is a next level of digitisation, where [banks] need to be present in business networks, marketplaces or corporate communities, like the SAP ERP customer base. [They recognise] that relying on their own channels will not be good enough going forward,” he says.

In a digital environment, stickiness will be enabled by exceptional customer experience and value-added services, Mr Rieker adds, which is underpinned by standardised connectivity such as SAP Multi-bank Connectivity (MBC). He believes that it is also the first step towards “invisible financial services”, which means embedding banking services within corporates’ ERP systems.

“The connectivity is the starting point [for embedded services] – it needs to be in place so that information can flow seamlessly,” he says. “Then a bank can look at developing additional analytical services based on this new integration, such as providing the corporate with better insights, when to pay, how to better use their working capital, etc.”

As well as becoming the first EU bank to join SAP MBC, Santander Corporate and Investment Banking (Santander CIB) is now co-innovating with SAP around the concept of invisible banking. “The idea is for corporate users to have our services available whenever they need them. A corporate banking portal (or app) is not enough for us in our digitalisation strategy,” says José Luis Calderón, head of global transaction banking at Santander CIB.

“It all begins with our global transaction banking products: from payments to working capital solutions, including supply chain finance, sustainability finance. We will leverage our specific products, expertise, data and analytics to give value-added insights,” he adds.

Specifically, the two organisations are looking to create financial tools to help customers navigate supply chain disruptions and accelerate the decarbonisation of their industrial activities. Mr Calderón says that one area that they will be exploring is how to streamline the information exchange for sustainability-related transactions. But he also adds that the “possibilities are endless” when it comes to value-added services that can be created based on better insights into client activities.

While Santander understands the financial impact of these transactions, SAP has the technology and the business process knowledge, which can be leveraged across their common customers to create “exciting offerings” around sustainability, according to Mr Rieker. “We want to help corporates understand environmental, social and governance requirements and how to optimise their business processes from a sustainability standpoint,” he adds.

Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight

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