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What you should really know about Bank Connectivity

Bank connectivity is a crucial function for treasury teams to gain cash visibility and transmit payments. Yet, there remains much confusion about what the best solutions are, and whether service bureaus, banks, or SWIFT is the best solution. In this presentation, we will arm you with the facts and tailor recommendations based on your banking profile.

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What you should really know about Bank Connectivity

  1. 1. What you really need to know about Bank Connectivity Bob Stark Vice President, Strategy Kyriba
  2. 2. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 2 Agenda Today’s Discussion  Introduction to Connectivity for – Bank Reporting – Payments  What is the best way to connect to your banks?  Securing bank connectivity  Questions (and answers)
  3. 3. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 3 Treasury Management System PD Encrypted messages and files sent directly to TMS Prior day and current day reporting •BAI2 •MT940 •XML CAMT •Regional formats Bank Connectivity – for Bank Reporting CD PD CD PD CD
  4. 4. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 4 Approved payments sent to Banks Encrypted payments sent from HUB to SWIFT Network 1 2 3 Ack Levels transmitted to HUB Ack/Nack notification provided to TMS/ERP Bank Connectivity – for Payments 4 1 4 1 4 Treasury Management System Encrypted messages and files sent from TMS Authentications received into TMS from bank
  5. 5. Bank Connectivity…explained
  6. 6. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 6 Making Sense of Bank Connectivity Communication Protocol Formats FTX FTP Security How we connect Message Content How we keep it private Zengin
  7. 7. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 7 Bank Connectivity Choices 1 2 3 Host to Host Connections Domestic/Regional Networks MT Concentrator Service SWIFT Alliance Lite 2 SWIFT via Service Bureau 4 5
  8. 8. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 8 Bank Connectivity Choices Connectivity Choice Description Best Scenario Host to Host (e.g. FTP) Direct connection to the bank Any North American bank Domestic Network (e.g. EBICS, Zengin protocols) Network to connect banks in that country Multiple banks or high volumes in a particular country (e.g. France, Germany, Japan) MT Concentrator “Borrow” your vendor’s BIC Low number of accounts per bank (e.g. 20 accounts at 10 banks) SWIFT Alliance Lite2 Hosted by SWIFT Willingness to self-manage some of SWIFT connectivity AND Low payment volumes SWIFT Service Bureau Managed by Service Bureau Global, and medium to high volume transactions
  9. 9. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 9 How Do I Choose?
  10. 10. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 10 Bank Connectivity: Choosing Well If done right… • 100% of cash balances will be known • All payments can be transmitted automatically w/out manual steps • Solution will be cost-effective; you won’t have overpaid • Complete bank independence and flexibility to grow/change banking relationships • No IT Support will be required to maintain connectivity or changes in bank formats
  11. 11. Securing your bank connectivity
  12. 12. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 12 Fraud Prevention: What we thought about in 2015 Fraud Detection Payments Access to Treasury Technology Supplier Account Verification Investments & Trading Bank Account Mgmt Do I have visibility into every payment? Are my controls consistent for every bank, every region, every person? Do I review my ACKs? How many bids before a trade? Can Settlement Instructions be modified? How many layers of protection exist after your password Are there controls to prevent unauthorized change to supplier payment info? Do I know my account signers? Who can change them? Does my bank have the same list? Do I use payment watchlists? Do I have a control center to view all transactions and modifications? Fraud & Cybercrime in Treasury
  13. 13. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 13 Fraud Prevention: What we think about now Fraud Detection Payments Access to Treasury Technology Supplier Account Verification Investments & Trading Bank Account Mgmt Do I have visibility into every payment? Are my controls consistent for every bank, every region, every person? Do I review my ACKs? How many bids before a trade? Can Settlement Instructions be modified? How many layers of protection exist after your password Are there controls to prevent unauthorized change to supplier payment info? Do I know my account signers? Who can change them? Does my bank have the same list? Do I use payment watchlists? Do I have a control center to view all transactions and modifications? Connectivity Can connectivity be compromised? Fraud & Cybercrime in Treasury
  14. 14. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 14 Can my connectivity be compromised? Yes, connectivity workflows can be hacked  Steps can be taken to minimize likelihood of attack  What we learned from Bangladesh Bank and similar hacks: 1) Separation of duties critical 2) UserID and Password insufficient 3) Preventing fraud is more than just protecting initiation/transmission
  15. 15. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 15  Securing access to the connectivity channel means: 1) If multiple systems used (e.g. TMS, ERP, SWIFT) then files must be encrypted when traveling in between systems 2) Implement good authentication protocols to ensure authorized access to any/all systems within the workflow 3) Where available, apply digital signatures (e.g. SWIFT 3SKey) to authenticate exported payment files 4) Ensure treasury’s choice aligns with your organization’s information security policies Securing Bank Connectivity
  16. 16. In summary
  17. 17. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 17 Feature Description Workflow Bank balances/transactions reporting -> Cash Position & Accounting Payments Dashboard & Approval workflow Control Center (to check files and workflow changes) Security Application Security – e.g. multi-factor authentication, IP Filtering Data Security – e.g. encryption at rest Payment Authentication – e.g. Digital Signatures, Encryption keys Connectivity Multiple choices to optimize cost! • SWIFT Concentrator (Shared BIC) • SWIFTNet – Alliance Lite2 and Service Bureau options • Regional protocols (e.g. EBICS, Zengin, Editran, etc.) • Host-to-host (e.g. FTP) Format Transformation Automated format translation Bank format library(there are 1000s of formats, even for “standard formats”) Bank Connectivity Checklist
  18. 18. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 18  Kyriba Connectivity fact sheet  Kyriba Qualcomm case study Further reading
  19. 19. Questions? Email: bstark@kyriba.com Twitter: @treasurybob Blog: kyriba.com/blog/bob-stark
  20. 20. © 2016 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 20 Thanks for attending facebook.com/kyribacorp twitter.com/kyribacorp linkedin.com/company/kyriba-corporation youtube.com/kyribacorp slideshare.com/kyriba kyriba.com/blog

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