Guide

The challenges companies face when building bank integrations for their payments

3
October 2022
0
min read

Companies building payment products or processing large volumes of payments as part of their operations often cannot rely on usual bank connectivity solutions. Their bank's web app or vendor's cash management system introduce technical, functional, and scalability limitations. The alternative is a direct integration with their banks that enables them to automate their payment operations from their in-house systems.

Although highly scalable and secure, banks’ direct connectivity solutions can be complex to understand and integrate, even for the most skilled product and engineering teams. They can also be a significant de-focus on a roadmap already filled.

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At Numeral, we have built more than 10 bank integrations at Numeral over the last 12 months. This first-hand experience has enabled us to learn the specificities of every bank we have integrated with and refine our integration model over time. We now have a scalable process and a powerful bank integration engine that enables us to connect most banks to the platform in a fraction of the time it took to develop our first integration.

This article shares our learnings on the challenges of building direct bank integrations. We also outline how Numeral can help accelerate bank integration projects, prepare companies for the future, and transform high upfront investment costs into predictable variable costs.

The challenges of building a bank integration

Accessing banks' direct connectivity solutions is more complex than creating a self-serve account and obtaining your API keys. If not already done, the first thing to do before even getting access to the bank's documentation is to open an account, and subscribe to the bank's connectivity solutions. The right stakeholders to do so is the cash manager.

Cash management is one of the many lines of products and services that banks offer to their corporate customers. It is also one of the most technical. As a result, banks have built teams of cash managers that are distinct from teams of account managers.

Accessing banks' direct connectivity solutions is more complex than creating a self-serve account and obtaining your API keys.

Because account managers have large customer portfolios and need to liaise with different teams from within the bank, response turnaround can sometimes be longer than what product or engineering teams working on a sprint need to reach their velocity goals.

Choosing between all the bank connectivity options

Banks have strengthened their systems' reliability through years of iterations, keeping their customers’ funds secure and processing billions of payments yearly to power the economy. This iterative process created significant variability and complexity in those systems, reflected in the heterogeneity of their connectivity solutions for different use cases.

Connectivity

In Europe, connectivity channels include the below main channels

  • EBICS servers are designed to automate payments securely but require payments to be manually approved
  • SFTP servers enable end-to-end payment automation
  • Messaging queues enable high throughput
  • APIs are designed for companies looking for real-time payments but progressively expanding across other rails
  • PeSIT and ETEBAC are bank connectivity protocols developed in France in the 1980s-1990s and used by certain banks

It is worth noting that different payment types might use distinct connectivity protocols and file formats for a given bank. SEPA instant credit transfer payments are an excellent example of API-based or messaging queue-based implementations, marking a departure from banks' historical file-based connectivity. If connectivity channels differ by payment method, each payment method requires distinct and incremental integration work.

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The challenges of building a bank integration

Accessing banks' direct connectivity solutions is more complex than creating a self-serve account and obtaining your API keys. If not already done, the first thing to do before even getting access to the bank's documentation is to open an account, and subscribe to the bank's connectivity solutions. The right stakeholders to do so is the cash manager.

Cash management is one of the many lines of products and services that banks offer to their corporate customers. It is also one of the most technical. As a result, banks have built teams of cash managers that are distinct from teams of account managers.

Because account managers have large customer portfolios and need to liaise with different teams from within the bank, response turnaround can sometimes be longer than what product or engineering teams working on a sprint need to reach their velocity goals.

Accessing banks' direct connectivity solutions is more complex than creating a self-serve account and obtaining your API keys.

Not sure where to start?

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