How to Leverage Banking Connectivity in Your Finance Teams

A digital banking connectivity solution offers numerous benefits to finance teams, including time savings, improved accuracy, and enhanced cash flow visibility. By automating the retrieval and consolidation of bank account data, these solutions reduce the risk of human error and streamline financial reporting. Real-time access to account balances and transaction details allows for better cash management and decision-making. Additionally, a banking connectivity platform simplifies compliance, fosters collaboration, and provides robust security features to protect sensitive financial data.

Integration with other financial tools, such as accounting systems and ERP systems, creates a seamless workflow for finance teams. Cost savings can be achieved through automation and reduced staffing needs, while scalability ensures that the solution can accommodate growth. Overall, a banking connectivity solution significantly improves the efficiency and effectiveness of finance teams, enabling them to better support the success of their organisation.

Banking Connectivity needs to be tailor-made to a company’s needs

Banking connectivity needs can differ greatly among businesses, with the intricacy of the system relying on various aspects such as the quantity of bank accounts, banks, locations, data clarity levels, and crucial company operations like payment validation, mergers and acquisitions, and cash pooling. Essentially, the more extensive the organisation, the more vital it is to have a strong banking connectivity system in place.

However, the goals for incorporating banking connectivity are constant: to enhance the visibility of banking information, oversee bank transactions, and accelerate data consolidation and reconciliation. Let’s look at two use cases which exemplify the power of banking connectivity to enhance performance in financial teams.

Case #1: Leveraging Banking Connectivity for Better Alignment

Based in Ireland, Enterpryze has been a customer of Agicap since 2022, utilising banking connectivity features to strengthen their finance team's cash flow management. With five distinct global entities in countries such as Ireland, Brazil, and Colombia, Enterpryze consolidates their management within Agicap, allowing for cash flow planning comparisons at both group and subsidiary levels.

Enterpryze's finance teams are avid users of Agicap's tool, integrating it with their own ERP software, Enterpryze, for daily cash flow monitoring. Various finance teams within the company employ different scenarios in Agicap to devise their strategies. The accounts payable and accounts receivable teams collaborate within Agicap, enabling visibility into each other's forecasts. Consequently, the CFO can evaluate and differentiate between his teams' scenarios and his own, making well-informed global strategic cash flow planning decisions by monitoring real-time data against the initial business plan (P&L forecast in the main scenario). This allows Enterpryze to better manage payments and receivables over time.

For European banking aggregation, Enterpryze utilises open banking through PSD2 APIs. For international operations, automated host-to-host protocols via SFTP are employed to enable global banking aggregation. Establishing banking connectivity in Agicap via API is faster compared to EBICS and other systems. Users simply navigate to "banks and integrations," connect their bank, select their bank (e.g., "Bank of Ireland"), input their credentials, and the system retrieves the past 90 days of bank statements for analysis – all completed online without any paperwork.

By leveraging Agicap's cash flow management tool, Enterpryze has significantly enhanced data communication within its finance team, resulting in more informed and strategic decision-making.

Case #2: Connectivity challenges in an M&A Context

An exemplary company that depends on banking connectivity for its operations is Simago. Established in 2018, Simago consists of a network of medical imaging centres spread across Europe. This French organisation comprises 50 entities and manages 200 bank accounts, approximately 80 of which are in other countries. This number continues to grow due to the company's mergers and acquisitions activities. Simago connects to all French banks via EBICS and selected Agicap for short-term cash management, utilising bank balance monitoring, short-term forecasting, and an all-in-one payment tool. They aimed to integrate the banking connectivity system with their ERP, sending payment orders from the ERP to the banking connectivity tool and receiving bank statements from the tool to their ERP.

Simago's challenge lies in its centralised finance department, which must supervise numerous entities and their corresponding bank accounts. When expanding into new areas, the group often faces obstacles such as varying channels, formats, regulatory parameters, and currencies. As mergers and acquisitions propel the group's growth, cash visibility becomes a top priority. They must determine their available cash, the amount transferable from entities to the holding company for regular cash pooling, debt repayment amounts, and potential investment opportunities. Legally, they cannot change the banks of acquired companies, making clean and accurate connectivity to all banks and accounts essential for consolidating financial data at both entity and group levels.

For swift and informed decision-making, Simago requires prompt and dependable financial data. A robust banking connectivity system is crucial for efficiency, as manually checking account balances would be highly time-consuming. However, this can be challenging due to insufficient digitization and EBICS connectivity among banks. Moreover, each bank has unique, often outdated and inefficient processes, accompanied by extensive paperwork for connectivity setup. Consequently, a multi banking connectivity system like Agicap is vital to Simago's operations, helping them navigate and manage these challenges.

Over 7.000 companies already use Agicap as a banking connectivity as-a-service, including many more features for cash flow management and related financial processes. Ask for a demo here