Bank & Enterprise Connectivity Continues to Challenge Finance and IT

A recent Pulse Survey reveals the extent of difficulties and challenges bank and enterprise connectivity represents for corporates maintaining and managing their own connectivity.

The survey of 100 IT and Engineering leaders covered questions related to how companies today support, partner, deliver and maintain bank connections for ERPs and other systems in general. Banks and ERP connections are the pivotal point for so many finance and operational functions and processes. Cash management, cash application and revenue reporting, payments hubs, treasury activities, and working capital programs all rely upon secure, efficient, and automated links to deliver or transmit information between your organization and your bank.

ERP is a complex task, and it requires multiple areas of expertise to implement and manage
Over half of respondents (59%) say they have a dedicated IT manager responsible for bank connectivity.

Furthermore, and not surprisingly, 88% of IT leaders with dedicated bank connectivity staff, answered that “connecting banks to the ERP is one of the most complex tasks” faced by their teams. When the criticality of banking information is so clearly tied to successful decision-making for strategic advantages and daily operations for treasury and finance, it is clear connective, quick and leading technology is not being applied for most of the survey respondents.

Traditional Bank Connectivity Requires Dedicated Staff
An interesting finding from our respondents is the confirmation that a large majority of IT orgs are still staffing dedicated IT resources primarily for bank connectivity. Some very clear trends and perspectives unfold when interpreting these answers and metrics. For instance, while some corporates have automated their connections with APIs and other services, effectively shortening and reducing the time sink of bank connectivity projects, the majority are still operating under old project methodologies and frameworks. These involve teams of individuals from both the corporate and the banks aligning on objectives, swapping sample files and specifications to begin development of file-based transmissions of payment and bank reporting files and iterative, time-consuming testing.

Why Finance Talent is Required for IT Connectivity Roles
When over 50% of your IT staff traditionally have some finance background, it indicates that there is more than just IT and technical acumen needed. When dealing with banks, financial reporting, accounting and payments, IT resources must have finance as part of their skillsets. Why is this? Well, being able to understand the implications of bank reporting outages, the data contained within bank statements, payments, fraud attempts, close and reporting cycles all spells a human element still required using older technology to ensure daily operating confidence. However, as IT and Finance both rely upon these resources to maintain a healthy, effective reporting pipeline for all of finance and accounting, staffing shortages are becoming more problematic. The Great Resignation and the ‘War for Finance Talent’ becoming more prevalent over the past two years play a role in IT’s ability to find the resources to match the need. How does IT change the lens of staffing shortages and look for long-term solutions? The answer lies in innovative technology that automates the repetitive, the reusable with APIs and machine-learning.

For IT managers in charge of ERP bank connectivity, experience in finance is preferable in addition to technical IT expertise
Over half of respondents (53%) indicated that the individual responsible for connecting their technology systems to global banks had a background in finance.

Inconsistent Timelines for Bank & ERP Connectivity
Beyond the day to day, operational and reporting needs, bank to ERP connections are the starting point for major projects, whether those are upgrades or new implementations. The problem we see emerging from this survey is the fact that CIOs and CFOs don’t know the true extent of the effort involved in connecting their systems to their partner or relationship banks. These leaders’ orgs are also likely not deploying APIs or connectivity as a service solutions or products that can enable and drive consistency with each bank and reduce the overall timeline.

Timelines for just connecting banks ranges anywhere from 1 to 4 (or more) months. There are numerous factors, but connectivity protocols, proprietary connection methods, encryption keys and a wide variety of service level agreements, makes connecting to banks anything but easy using traditional mechanisms. When looking at adding payments and bank reporting for treasury and accounting or finance visibility, timelines can extend much farther out to 3 to 8 months. One way to counter this trend is to begin the shift to pre-configured, pre-delivered connectivity and tools that ease the burden for both the finance/IT org and the bank. APIs, AI/ML and RPA can help automate the steps involved in connecting, ease the testing timelines and get up and running faster.

80% of respondents indicated that connecting a new bank to their ERP takes more than a month.

The PULSE survey highlights organizations using outdated and outmoded technologies and the implications in the form of actual costs in staffing levels, timelines and scalability when for connecting banks to ERPs, financial reporting tools, 3rd-party systems for payments or reporting. To learn more about how tools are evolving and ready now for greater speed, agility, resilience, and capabilities, read our ERP Migration ebook.