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Multi Bank Connectivity Overview

Multi Bank Connectivity overview:

Introduction:

This document covers overview of Multi Bank Connectivity and its integration with other sub-modules in SAP along with configuration setup required. The focus in this blog is to understand what changes are brought in by MBC services offered by SAP. We shall start by understanding the concept of SAP Multi Bank Connectivity (to be read as MBC in this document), its landscape and its advantages.

MBC overview:

  • Introduction:

SAP Multi Bank connectivity is a cloud-based solution which offers a multi-bank digital channel between SAP and banks. The MBC solution has embedded SWIFT connectivity. MBC has incorporated several measures of security.

  • Who can use SAP MBC?

SAP customers ON ECC (if on ECC it must be SAP ERP 6.0 or EHP 0 or higher)

SAP customers on S/4 HANA Cloud

SAP customers on S/4 Hana on premise edition

  • What changes with SAP MBC?

Customers interact with banks on daily basis. Multiple files are sent to and received from bank. Communication with bank has increased drastically in today’s time. Businesses these days expect secure and real time communication with bank. In order to have a successful communication with bank, it is required to establish a connection with bank.

Communication with bank was happening even without SAP MBC being in place. However, with introduction of SAP MBC, communication with bank has become very convenient and cost effective. Below are some pointers of before and after SAP MBC solution.

Before MBC After MBC
Host-to-host connection for each bank No host to host connection required
Without connection to bank, users need to login to bank portal and download files manually Real time responses and data updates since MBC is closely integrated with BCM
Difficult/expensive to change business to another bank once a host to host connection is established No more a challenge
Increase in operational cost to maintain connections with multiple banks Cost effective solution
  • SAP MBC message types:

Below are the types of files that are transferred to and from bank on daily basis in a general business scenario:

  1. Outgoing payment files
  2. Incoming payment acknowledgement file (PSR)
  3. Incoming bank statement
  4. Incoming lockbox files
  5. Incoming and outgoing trade confirmation files
  6. Bank fee analysis report

Formats supported by MBC:

  1. Payment file formats

PAIN.001

PAIN.002

PAIN.008

  1. Bank statements/lockbox

CAMT.53

CAMT.52

CAMT.54

MT940

MT942

BAI/BAI2

  1. TRM inbound/outbound file formats:

MT300

MT320

SAP MBC can connect to bank in following different ways securely:

  • SWIFT connectivity (customer is a SWIFT customer)
  • Direct bank connectivity
  • Connectivity using customer managed solution for e.g., in house banking solution
  • Connectivity to a non-member bank or 3rd party provider such as EBICS (customer is a member of EBICS)

Note:

SAP will connect clients to their banks irrespective of the membership status of the bank

EBICS: Electronic Banking Internet Communication Standard.

SAP partners with SWIFT

A SWIFT service provider is no longer needed for needed for SAP customers to send messages via SWIFT network. With this partnership, SWIFT layer to integrate with SWIFT network is embedded in SAP MBC. As a result, customers can leverage the bank reach that SWIFT network provides.

Note: An sap customer intended to connect to SWIFT network must be a member of SWIFT. However, only change here is SWIFT membership is required but SWIFT services are now being given by SAP which ensures seamless integration with other modules and real time communication with banks.

MBC integration with other modules

Bank data files are generated from SAP back end systems and is not a part of SAP MBC. SAP MBC is closely integrated with several modules which process/consume the data from files. SAP MBC is very closely integrated with Advance payment management- which is a payment factory (explained in my next blog) and BCM- which is responsible for batching and updating PSR’s based on message types.

SAP MBC security

SAP MBC provides end to end security features for SSF (Secure Store and Forward)

Below is the list of communication protocol supported by SAP MBC:

  • SFTP
  • HTTPS
  • AS2
  • SOAP
  • EBICS
  • SWIFT

Customers can choose encryption/decryption and signatures depending on requirements.

Member bank services

As described above SAP is now a SWIFT partner hence ensuring seamless communication with bank and integration with other sub modules. Banks, if choose to become member bank with SAP, they can provide additional benefits to their customers via SAP MBC since it is integrated with other modules like in house banking, BCM, TRM, Advance payment management and much more.

MBC Landscape

SAP MBC has a very simple landscape. Client can be on any system ECC or S/4 HANA Cloud or S/4 HANA On- premise. It is possible to connect to MBC.

SAP’s Multi bank connectivity has a connector. MBC connector is on SAP’s customer system. SAP MBC connector connects to SAP MBC app. All messages to and from SAP MBC will pass through MBC connector.

A message monitoring app is available at the MBC connector- customers can use Manage Bank messages app or connector monitor app.

For each customer who is connecting to SAP MBC, a tenant is created which represents resources of cloud-based platform. Also, for each customer with SAP MBC separate secured resources are allocated to cloud platform (memory, CPU and file system) these resources are referred as tenants.

  • Membership and connectivity are not open to public
  • Digital signatures and encryption of data ensures integrity and authentication
  • Each network participant has a unique tenant; meaning, every customer on SAP MBC has a unique tenant ensuring integrity of data
  • Each tenant has separate database scenes
  • Separate integration data flows for each tenant

The messages are passed from customer to bank using MBC connectivity. Each customer on MBC has a tenant which acts as receiver and sender tenant for message based on message type. The customer tenant acts as a sender tenant when a message is going out from customer’s SAP system and bank tenant acts as a receiver tenant and vice versa in case of incoming messages from bank to SAP system. Data isolation is achieved by splitting the message between sender and receiver tenants.
Below diagram shows data is processed separately by respective tenants:
Customers have option to add encryption and digital signature for this communication path.

Configuration

  • MBC Connector:

MBC connector provides a file interface that provides a logical file path. Logical file path definitions must be defined using tcode FILE. Configuration for MBC connector is same for S/4 Hana cloud extended edition, S/4 Hana on premise or ECC.

  • Sender and receiver ID configuration

Sender and receiver ID’s are used for routing messages to and for in SAP MBC. These sender and receiver ID’s are agreed upon by customer and bank from start. Sender id is maintained at house bank level.

Path: Financial Accounting → Bank Accounting → Bank Accounts → Define House Banks

Transaction code: FI12

Sender id is corporate identifier which is pre agreed by bank and customer and is maintained as customer number at house bank level.

Receiver id is SWIFT/BIC of receiver bank. This is derived from bank master data in case of payments. BIC code in receiver ID is maintained at house bank level. Custom receiver ID’s can be maintained under MBC connector → Maintain custom sender/receiver ID. This configuration will override default receiver ID of BIC code.

  • PMW configuration while using SAP MBC

Below configuration stands good if the customer is on SAP S/4 HANA Cloud 1909/ extended or above.

Bank processing setup is done independent of SAP MBC. Select SAP MBC connector in transaction code OBPM1 while creating DME structure for payment files. Bank EBS processing of payment files is separate than MBC.

  • Inbound file configuration:

A variant is created for each format. While creating variant for tcode FF.5; variant name should be blank as system imports bank statement, program recognizes that it is to be read from the payload messages and not from physical file.

Configuration path: Multi-Bank Connectivity Connector → Maintain Selection Variants for Bank Statements.

Customers can select the option to download the file and customers can manually update bank statement. In such a case, the MBC connector downloads the file in application server.

Customers also have option to download the bank statement and import the same into SAP, below settings should be maintained:

For manual processing:

Configuration path: Multi-Bank Connectivity Connector → Maintain Inbound Processing Steps.

  • SWIFT Parameters configuration:

SWIFT file ack contains control information that manages the exchange of messages. This information is added in header to SWIFT. SWIFT parameters are configured using the configuration set and same will be sent to SAP MBC with each message.

Set SWIFT parameter setting in customizing that is used in header of SWIFT message, this configuration is based on receiver ID and message type.

Following SWIFT parameters can be set:

  • AckIndicator
  • AckRequestType
  • FileDescription
  • FileInfo
  • NonRepudiation
  • Priority
  • ReceiverBIC
  • RequestRef
  • RequestType
  • Responder
  • SenderBIC
  • Service
  • Sign
  • TransferDescription
  • TransferInfo

Path: Multi-Bank Connectivity Connector → Maintain SWIFT Parameters.

Archiving:

MBC connector accumulates number of messages over a period of time. These messages can be archived after a specific time. This period is known as residence time. In order to configure residence time for MBC connector messages, use below path:

Multi-Bank Connectivity Connector → Maintain Residence Time for Message Archiving.

Note:

  • Data archive takes place in archiving definition program (SARA)
  • Use Manage your solution Fiori app for guided configuration on MBC connector for S/4 Hana cloud

Technical settings required for MBC Connector:

  • MBC connector is an add on for ECC. Customers must install MBC connector.
  • MBC is included with all S/4Hana implementations
  • For S/4 Hana cloud essentials, cloud operation teams is responsible for MBC implementation

Below are few important technical settings required for MBC connector implementation:

Example of SSF profile:

Path to maintain SSF Parameters:

Multi-Bank Connectivity Connector -> Maintain Secure Store and Forward (SSF) Profile Data

MBC in a nutshell

  • MBC is a cloud-based solution offered by SAP
  • SAP has partnered with SWIFT. Having said that, it does not mean SWIFT is no more required, it means SWIFT layer is now embedded with SAP MBC.
  • Customer must be a SWIFT member to be able to send files over SWIFT network.
  • No more host to host connection required
  • Cost effective solution
  • Easy flexibility solution to switch banks in case if customers wish to do so
  • Member bank benefits with SAP
  • Real time responses and updates since SAP MBC is closely integrated with several other modules like BCM, TRM
  • Easy trade confirmations for TRM
  • Payload changes does not happen with MBC. Processing of data is still done in back end, meaning DME setup is still done in back end leveraging data medium exchange engine.

And much more

 

Please feel free to drop your comments below.

 

Happy SAPing

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