Financial Services News

Santander joins SAP MBC to embed financials into processes


SAP has expanded the SAP Multi-Bank Connectivity system with the addition of Santander Bank.

The global banking giant, which is based in Spain, is the first European bank to become part of the SAP MBC system, a cloud-based service that connects businesses to their banking partners so they can embed financial transactions, like payment approvals, directly into business processes.

Analysts noted that SAP MBC — which launched in 2020 and works with SAP ECC 6.0 and higher, S/4HANA on premises and S/4HANA Cloud — is not doing anything new with enabling e-commerce capabilities. The competitive landscape is robust, but it does offer attractive banking integration capabilities, particularly with SAP systems and modules.

Santander wanted to give corporate customers easier access to the bank’s financial products, according to José Luis Calderón, head of global transaction banking at Santander CIB.

“Eliminating complexity in connectivity will improve the bank’s relations with our corporate clients,” he said. “This allows us to reduce timing and cost in those processes; therefore, we will be able to support clients’ growth and banking needs.”

The embedded connectivity will enable global transaction banking products, including payments and working capital applications such as supply chain finance and sustainability finance, he said.

“A corporate banking portal is not enough for us in our digitalization strategy,” Calderón said. “And we will use our specific products, expertise, data and analytics to give [value-added] insights.”

Transactions embedded where decisions are made

SAP has seen an increase in demand from banks that want embedded methods for connecting with their corporate customers, according to Falk Rieker, SAP global head of IBU banking.

“There’s been a fundamental change in thinking over the past two or three years as banks understand their own channels are not sufficient anymore in the digital economy,” Rieker said. “They need to be present in new ecosystems. They need to be present in marketplaces. They to be present where the customer makes the decisions.”

The idea is to bring services that have been available to consumers for a while to B2B transactions and finance, he said. For example, while it’s easy for consumers to immediately get a payment plan or loan when purchasing goods, this has not been common for B2B transactions.

“We’re seeing these type of things more and more in corporate banking, which we call embedded financial services, where the banks’ financial services get embedded into the corporations’ business process,” Rieker said.

SAP MBC supports the global electronic banking standard Society for Worldwide Interbank Financial Telecommunications (SWIFT) and digitizes the process that companies need to perform to connect with financial institutions, according to Rieker.

This kind of integration is usually cumbersome and time-consuming because each institution has its own proprietary system and data format. MBC standardizes the process, making it easier customers can onboard or switch banks, he said.

In addition to Santander, more than 200 banks, including CitiGroup, are MBC partners, and thousands of corporate customers are using the service, he said.

MBC nothing new, but useful

There’s nothing particularly new with SAP MBC, as modern treasury management systems (TMS) have handled transactions in the background for years, according to Predrag Jakovljevic, analyst for Technology Evaluation Centers.

Most banks integrate with SWIFT and third-party data exchange systems, which is available via modern TMS, Jakovljevic said, and data integration has been moving from batch to near real-time for decades. He pointed to Fiserv as an example of a service provider that does this well.

“It seems to me that SAP is just catching up rather than doing anything unique,” he said. However, he did note that the internal integration between MBC and other SAP modules was interesting.

Banks like Santander are joining MBC because of the service’s robust capabilities to securely integrate financial services under one application. But customers should also consider the many startups out there as well, according to Ray Wang, principal analyst and founder of Constellation Research.

One example is Bond, a platform for embedding credit applications, he said.

“Most banks are fearful of creating another dependency on SAP, so they are on the fence about MBC,” he said. “That’s why there hasn’t been as much rapid adoption as SAP may have expected.”

Jim O’Donnell is a TechTarget senior news writer who covers ERP and other enterprise applications for TechTarget Editorial.



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