Why Is Bank Independency Important?

05/07/2017

Formats & Interfaces

Another good reason to use bank independent solutions is not to find yourself in a so called lock-in situation when looking at file-formats and interfaces. Where local formats or proprietary interfaces may have their benefits, formats and interfaces will be subject to change or even may be replaced by the bank offering the service. Recently a bank had decided to phase out a proprietary reporting format. Although this was done with an alternative reporting format and customers had a reasonable period to migrate, many of them were confronted with major changes in their business applications from which many of them being legacy systems.

Again in this case using a bank independent solution will not prevent you from change but a good bank independent solution or tool will offer the flexibility to deal with this type of change outside the corporate IT domain. Still a project but one with less impact on the organisation. When using fully bank independent instruments (for example MT101) the number of changes are limited to a bare minimum and in case of compliance will always be dealt with by the vendor as part of its service.

Cost Savings

Last but not least a bank independent will save costs. Of course there is an investment consideration with regards to a bank independent solution but when looking at the business case the benefits of not having to manage changes due to compliancy or technological developments will in most cases create a break-even point somewhere in year 2.

Recent customer case-studies even showed a significant decrease in costs in year 1 simply by not having to change its output from their applications creating payment instructions when expanding their business to other regions using new local banks. By itself not a bad investments, even when leaving the non-qualified benefits of bank independency aside.