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How the presence of non-banking players in the payment space is making invisible banking a reality

April 2023

A paradigm shift has been under way in the Cash Management business for some time now. Where once there was a bilateral relationship between the bank and the client, this is now a multilateral business where third parties participate to improve the overall service experience. In this context, Santander is analysing how to collaborate with new participants.

Before discussing SAP Ready, our solution for navigating this paradigm shift, it is important to describe the baseline situation. As a global bank, it is crucial for us to be at the forefront so as to continue offering a best-in-class service to our customers.

To make this possible and advance on a firm footing on this journey towards ‘invisible banking’, we explored what the market would want to simplify and facilitate their cash business. Here is where SAP Ready was born. SAP is the most widely used ERP among corporate clients, and it is the perfect partner to co-create distinctive solutions and make ‘invisible banking’ tangible.

Our alliance with SAP seeks to accelerate the digitalization of Global Transaction Banking services for our clients while helping them navigate supply chain disruptions and accelerate their decarbonization endeavours. SAP Ready’s ambition is to embed Santander Cash Management solutions, both global and local, within the client’s core system, enabling them to transact directly inside their own SAP ERP. It is important to highlight that SAP Ready is not only about Cash Management — it also covers the full scope of GTB solutions to enhance cash flow and lend efficiency to our clients’ supply chain using the most innovative solutions.

Jose Luis Calderon, head of Global Transaction Banking (GTB) at Santander CIB, said: “This partnership is a step forward in the digitalization of the solutions we provide to our clients, with a strong focus on connectivity, supply chain management and the energy transition. We already have a strong transactional banking solutions portfolio in Europe, America and Asia that helps our clients navigate the complexity of doing business globally. This value proposition comes from the combination of understanding their needs and their daily challenges while leveraging the latest technology that SAP can deliver and the depth and breadth of our product offering.”

In the Cash Management area, our vision is focused on three main pillars:

  • Connectivity: As we have announced on previous occasions, we continue working on the SAP Multi-Bank Connectivity (MBC) solution. This service connects banks and financial institutions to corporates across Santander’s footprint in a plug&play mode to resolve many issues that corporate treasurers face in their day-to-day operations by embedding banking services within corporates’ ERP systems.
  • Interoperability: We seek to offer cutting-edge technology in order to simplify and accelerate integration with our clients without requiring additional SAP installations. In this regard, Santander has been working on several initiatives to facilitate and accelerate our clients’ go-to-market processes and to boost their customer data extraction and transformation.
  • Evolution: This partnership is up and running, and the pace of initiatives to facilitate our clients’ operations will accelerate in the near future.

While the potential upsides of these projects for corporates are clear, the ability to quickly switch the banking provider could be seen as a threat, as it was thought in the past that a cumbersome process created ‘stickiness’, i.e., that customers would remain with their incumbent banking relationship because changing was too problematic.

However, this old-school mindset has changed over the past 18-24 months, fostered by the advent of cloud and application programming interfaces, as well as the rise of platform business models. Corporate banks now want to make it as simple as possible for customers to use their banking services by taking advantage of embedded finance solutions. For that reason, Santander is approaching not just ERPs but also TMSs and Bank Connectivity Providers, as their rise exemplifies corporates’ need for quick and easy-to-use solutions.