SAP SAP today announced that Citi’s Treasury and Trade Solutions has subscribed to SAP Financial Services Network (FSN), which provides secure communication for transactions between corporations and their financial institutions.
With SAP’s 2012 acquisition of Ariba, the supplier network which connects 730,000 buyers and suppliers, the FSN becomes a very compelling story, said Russ Wainwright, global head of financial services for SAP during a presentation at Sibos last month.
Connecting corporations and customers today requires time-consuming custom integration, said Sanjay Chikarmane, senior vice president and SAPs general manager of FSN during the SIbos discussion. Onboarding new corporate clients is very expensive and time consuming and each time you add a new service it takes more custom work, he explained.
“The corporate side has an analogous problem,” he added. “The larger ones deal with several banks. The perennial problem is the last mile integration — bank statements and remittances are hard to integrate with your ERP system.”
With FSN, the corporate’s SAP ERP system sends transaction files to the network, which transforms them into any bank format and routes them to the bank, and vice versa. The secure network is owned and managed by SAP as an on-demand offering.
Corporates don’t need to upgrade their ERP systems to join the network. It is a rapid deployment solution, taking just a few weeks to configure, according to SAP which has developed a package onboarding service. SAP will use a scalable pricing model, based on the number of transactions, so that corporates of all sizes can benefit from the solution.
Noritoshi Murakami, chief manager, corporate advisory department, eBusiness and IT initiatives at Bank of Tokyo-Mitsubishi said that what was just a concept last year at SIbos Osaka is now working well.
“We have successfully finished technical testing with SAP and we connected our global payment hub and FSN server last month. We tested transformation from XML message format to BTM (the bank’s) format and it shows SAP FSN works well, it is real. We are working with SAP Japan and SAP Singapore and inviting SAP users to connect.”
“Our clients are always exploring integration solutions that help reduce operating cost and time to implement,” said Andrew Gelb, head of Citi North America treasury and trade Solutions. “SAP Financial Services Network addresses clients’ needs via a single, comprehensive service offering that simplifies integration between corporates and banks.
The FSN is a huge plus for corporate clients, said Hubert JP Jolly, managing director and global head of channel and enterprise services at Citi.
“In the past for them connect ERP to our platform would take a lot of effort to initiate a transaction and get information back.” Now Citi has an easier job of cross-selling, he said, at least for clients on SAP.
“If they are on ERP with SAP and link to FSN, we can suggest they can connect just to Citi and drop their other banks.”
Other bankers said the direct connectivity would make richer information available to corporations and banks and make it easier to integrate services like foreign exchange and payments in supply chain.
Citi made its announcement at the AFP annual conference being held in Las Vegas this week.
SAP And Citi Link ERP To Bank Treasury Operations Through Network
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