January 23 , 2018

7 signs that it is time to rethink your bank connection strategy

by Finance centralization, Cash Management, Global Bank Connectivity

Are you guilty of these transgressions in your bank connectivity? If you are, it might be high time for you to change your bank connection software to stay safe and efficient.

bank connection strategy

Although I spend my days working mostly with Payment Factory solutions for globally listed companies, it is sometimes refreshing to take a look at the everyday business life of the medium and even smaller companies. After all, banking connections are something that every company has to solve, one way or the other, and in the end, the traditional bank connection software and sophisticated Payment Factory have a lot in common.

We often hear that mid-size companies struggle with the same finance management problems as the larger ones. But this is not the whole truth.

 

In terms of cash management, the smaller companies face almost all of the challenges of a large company, but have also smaller muscles and less experience to solve the problems.

 

You are not struggling with the problems alone. When it comes to bank connectivity, here are 7 situations that are actually quite prevalent among medium-sized companies  – and that tell you that it might be a high time to rethink your bank connection strategy.

1. Manual payment data entry

Your business has grown cross-borders, and you have had to adopt local tools and online banks for accounting. The ledger team enters the payment data to the e-banks manually. It astonishes me that companies are willing to bear the risk of manual entry in their bank connection strategy. I have heard plenty of justifications that include protected files and reliable employees. In my opinion, under the current risk policy, the one and only right solution is a secure and automatic bank connection software that can be scaled in step with your increasingly international business.

2. Manual balance information

You have hard time gaining visibility to your company’s currency and balance information. You have to gather balance information manually, for example, from e-banks every morning to form the basis of the day’s forecast. Nowadays, the management of bank accounts and balances should be an automated process, irrespective of country, formats, or banks in use. Excel simply is not the tool for cash forecasts anymore.

3. Unsecure data transfer

Data transfer between the ledgers and the bank connection software is not encrypted. Even if the data transfer takes place within the company’s internal network, laxity of this sort creates needless, highly favorable conditions for criminal and fraudulent activities.

 

If you want to know more about reducing the risk of fraud in your payment process, why not download our e-book on the topic.

 

4. Inflexible payment process

The payment process is difficult to follow through. For example, the ledger data cannot be read into the bank connection system if some of the payments are erroneous. Or: incorrect payments cannot be readily identified, removed or corrected during the process.

5. Complex bank account structure

As your company has established new subsidiaries abroad, numerous accounts have been opened for them in foreign banks. You know that you also have a lot internal payments, but there is not much you can do about that. An in-house bank is a modern and efficient solution that can be used either side by side with or as an alternative to the banks’ cash pooling structures, in order to set a basis for clear bank connection strategy, reduce the number of bank accounts and to improve the management of both incoming and outgoing payments.

 

How to manage corporate bank account structure with an in-house bank? Download whitepaper to learn more.

 

6. Archiving on paper

You have the option to print and archive account statements on paper or you can go through the cumbersome process of transferring the data from your bank connection software to another system. In a modern solution, archiving is an integral part of accounts management.

7. On-premise setup

Can the system be accessed only from certain workstations? Can there be multiple simultaneous users? Can all tasks be performed in parallel without fear of the software going ‘bonkers’? Is the system available to use when data is transferred to the banks? At times I am confused with by questions I receive. But there is a good reason for these questions. Many smaller companies, or the subsidiaries of large companies still use old tools or bank proprietary solutions, which can be quite far from modern standards. Today, it is reasonable to require that a modern global bank connection software is provided as SaaS, is reliable and allows flexible, secure and parallel use.


As I mentioned in the beginning, mid-size companies often face the same challenges as the large companies. However, there is no need to remain number two as far as the bank connection strategy and the tools of the trade are concerned.

In fact, the cloud-based Payment Factory familiar for its utilization in large companies is scalable to a brilliant tool for mid-size companies as well. In OpusCapita, all the above mentioned items are included as standard features. How about the systems you use?

 

 

Jukka Sallinen

Jukka Sallinen
Head of Cash Management

Jukka is a cash management domain expert with a strong hands on background from international and complex payment factory and SWIFT projects. Previously Jukka has been working in various R&D roles, focusing on bank and ERP integrations and security topics.