Corporate-to-Bank (C2B) connectivity refers to the means by which businesses and banks exchange significant data electronically. Due to the right-implemented bank connectivity solution, relationships between customers and banks are getting stronger and more profitable for both parties.
Types of C2B Connectivity
Today, there are several types of C2B connectivity, and the international banking system SWIFT is the most widespread due to its efficiency. The system itself doesn’t perform the functions of calculation and mutual clearing between the participants. It’s implemented for creating and maintaining the transfer of messages between financial institutions. This process ensures the integrity and confidentiality of messages. This technology replaces and unifies outdated communication channels, like mail or teletype.
Although SWIFT is still in demand, C2B connectivity can also work according to the H2H (Host-to-Host connectivity) model, providing the following opportunities:
- High speed. Thanks to H2H, it’s possible to receive information about both sent and received payments in a few seconds.
- Security. With H2H, the data transfer is excluded from the chain. No intermediary file means no need to correct something manually which ensures less probability of data corruption. Moreover, the host-to-host technology makes it possible to track all user actions in the ERP system, increasing the transparency of all the processes. The exchange takes place without user participation, eliminating the chance of accidental or intentional information distortion.
- Convenience. The process of creating, signing, and sending documents to the bank is implemented in the process of making outgoing payments. Due to digital transformation, outgoing payments get transparent. Information about the status of outgoing transactions is auto-renewed based on the schedule.
Besides more modern types of C2B connectivity with improved fraud prevention, there are less technological alternatives, like classic file-based connectivity and remote banking systems. They are based on bank-provided software installed on the client workstations and can use both private networks and the Internet as a means of communication.
Implementation of C2B Connectivity
Due to a C2B model, banks have a great opportunity to provide customers with extra levels of comfort, cost-effectiveness, and value. It becomes easier to:
- improve decision-making, achieve end-to-end, real-time treasury visibility;
- improve capital allocation and cash flow results;
- decrease operational, financial, and legal risks;
- speed up transactions and increase straight-through processing.
With increased automation, banks also get many benefits because relationship managers can concentrate on providing their corporate customers with more value. Thanks to real-time enterprise resource planning, banks may better predict their clients’ needs and turn into more strategic partners by providing banking services through a corporate platform.
C2B Connectivity and Future Trends
Most experts believe that API connections are the most essential part of the C2B connectivity infrastructure of the future. However, the development of API connections is still in its initial stage.
API (Application Programming Interface) is a list of commands, requests, and responses that computer programs use to exchange information with each other and interact to “force” each other to perform some actions.
One of the best practices of API use is mobile banking apps that allow customers to make payments and perform other banking operations directly from their phones.
The provision of banking APIs to all corporations is a trend that is gaining popularity around the world. These emerging technologies open up a number of benefits for banks and consumers alike.
Even though Application Programming Interface connectivity benefits both parties, their implementation takes time and differs for different corporations. It’s due to varied internal technology capabilities and degrees of information security challenges. Additionally, mergers make it inevitable that even the most sophisticated multinational clients will have subsidiaries using outdated ERP systems.
After all, different financial services are used by most business banking clients, and they need a real-time flow of real-time financial data. It resides in a single environment to keep track of the information that arrives from various sources. Fortunately, API implementation makes C2B connections simpler and faster so that financial data is all in one location.