Two years ago (in spring 2022), we launched our first version of our multibanking solution. Since then, we have been able to continuously expand our scope and now offer our customers the option of connecting to more than 10,000 banks from Switzerland, 32 European countries, the USA and Canada for better liquidity planning and a live overview.
This enables companies to centralize all their bank accounts, regardless of the bank, in one place. Now, let’s review and look ahead.
Open Banking – we needed more time than planned
Right from the start at TRESIO, we had a vision of building a smart assistant for SMEs that has an overview of all financial data; enabling entrepreneurs to see how well their business is doing in real-time, and where they need to optimise. Bank data played a central role in this vision from the very beginning.
When we first seriously addressed the topic of a multibanking solution in spring 2021, one year after Tresio was founded, we met with strong resistance – especially from the banks. At the time, we didn’t know much about Ebics (more on this later) – except that we were told everywhere how complicated, complex and expensive it was – and so we did what entrepreneurs do in such a situation: we approached various banks and asked about the possibility of building a connection.
The unanimous answer was no. Resourceful consulting firms wanted to help us – with projected costs in the mid four to five-digit range per bank and high recurring costs per connected account. Not an option with our business model and as a self-financed start-up. In addition, a new product from the Six Group came onto the market – which (at the time) also seemed too complex and expensive for us, which is why we decided against it.
It took a further 12 months and many sales calls with various providers (during which we learnt more and understood the subject matter better each time!) before we were finally able to roll out our first version of our own multibanking product.
Europe: PSD2 – the standard and its pitfalls
As Switzerland seemed too complicated for us when it came to open banking, we initially built a solution for banks in other European countries. Thanks to the PSD2 standard, which is mandatory in the EU, this was a much easier way for us to gain our first banking experience. And we actually had a few customers who connected their Revolut accounts right from the start and gave us feedback – Kudos to you!
The Payment Services Directive 2 was introduced in the EU in 2018: PSD2 regulates the access of “third-party payment service providers” to the payment accounts of European bank customers and has thus obliged all banks in the EU to allow third-party providers access to their customers’ accounts via standardised interfaces since 2018. In principle, it is a change of perspective: the EU is explicitly stating that data on bank transactions does not belong to the banks, but to their customers.
This freeing-up of bank accounts quickly gave rise to a veritable industry of aggregators, which obtained the necessary licences to build interfaces with thousands of banks in the EU, standardising their data and then in turn sending this to third party providers via their own standardised form, with some models additionally enriching the information. Of course, the customer always agrees to this and can stop the process at any time.
The core objective of PSD2 was to free up customer accounts in order to simplify payment transactions, for example to enable direct payments from bank accounts when shopping online with KLARNA (one of the leading open finance providers). Account Information Systems (AIS), such as TRESIO and other service providers, were more of a by-product of the Payments Directive from the outset.
TRESIO works with GoCardless (which bought our first partner, Nordigen) as an interface provider. Our customers have already connected several hundred European bank accounts to our application, and we have noticed the following:
- The whole process is extremely simple and 100% digitalised. The bank does not need to know Tresio as an AIS, nor does it have any way of dictating to the customer what they do with their data and to whom they pass it on. We believe this is exactly how open banking should be – in the interests of the customer.
- Interface quality: Everything always sounds great, and the providers (aggregators) all boast about their x-thousand interfaces. The fact is that interfaces are constantly being changed and many providers struggle to keep up to date – partly because the banks do not always inform them in good time when they make changes to the endpoints. As a result, interfacing with smaller European banks does not always run as smoothly as might be expected. The difficulty then always lies in finding out whether the customer, Tresio, the interface provider or the bank is the problem – the support ping-pong is pre-programmed.
- Re-authentication required every few months. Lastly, the biggest drawback is the need for recertification. As mentioned at the beginning, PSD2 was primarily built for payment services – in other words, very transaction-based. A long-term connection for the purpose of data exchange was probably not even intended. Accordingly, the banks mitigate this by limiting connections from between 30 to 180 days – after which the customer must reconfirm the connection via online banking. This is an inconvenience for customers who want a reliable and constant insight into their transactions – especially as connections are sometimes cut earlier without prior notice and require re-authentication.
We really like the basic idea of PSD2, that data belongs to the customers and not the banks, but in my opinion it has not been implemented well.
We therefore now also recommend that customers with bank accounts from other European countries ask their banks whenever possible whether they also support our next standard: Ebics.
Ebics: proven and stable – but not yet a digital process
“Far too paper-heavy, complicated, expensive, and anyway – the product is for corporations, not for your customers! No bank will ever give you this or allow you as a partner!”
This was the initial feedback we received – especially from many banks. Thanks mostly to a lucky coincidence, we finally came across Konfipay (Windata), a German provider who for years have solely focussed on EBICS interfaces; their extensive knowledge enabled them to quickly and easily set up a scalable solution for us.
EBICS stands for Electronic Banking Internet Communication Standard. This standard ensures modern, fast and secure data exchange between banks and software providers such as TRESIO. The process of setting it up is a bit of a paperwork burden, but once set up, the interfaces run like clockwork and data exchange is uninterrupted.
The processes are slightly different for all banks, but in principle three things are required for such a connection:
- An application form to order the product from the bank
- The bank then issues the parameters with which we (Tresio) can initiate the connection
- We in turn create the initiation keys, which the customer signs and returns to the bank.
The fastest connection was up and running within two working days (very well done, Credit Suisse!), while the process can take months for the longest ones – this is usually primarily due to the fact that contracts remain with the SMEs and are not signed. The process normally takes two weeks from the initial application to established connection.
It is important to speak to the right people within the bank. Ebics is a very specific product and not all advisors are familiar with the procedure. We have now set up standard processes with pretty much all banks, through which we can guide customers and tell them who they can contact and with what wording in order to get the connection as quickly and efficiently as possible.
And yes, not all banks offer Open Banking solutions. We are also happy to show customers alternatives and refer them to banks that support the standard.
EBICS was primarily intended for company accounts. However, if necessary (e.g. for real estate customers, a portion is often held privately), private accounts can usually also be connected without any problems from a purely technical point of view.
We are big fans of the EBICS standard for SME bank connections:
- Ebics is reliable and, once set up, runs like clockwork – data losses of entire days, which can occur from time to time with API-based protocols, are therefore ruled out.
- Data sovereignty lies with the customer. With Ebics, there is no middleman reading the data and adding to the cost.
- Ebics is free of charge. At least, that’s what we thought until we encountered banking in Luxembourg; there it costs EUR 1000 per month. Fortunately, this is really the only outlier we have so far seen.
Ebics is widespread in the DACH region and in France, but we are also hearing from the first US banks looking into introducing it. Speaking of which:
USA: It can’t be that difficult
One year after our first bank interface went live, the first major family office approached us with a request to cleanly map their ~150 bank accounts via Tresio. In addition to Europe and Switzerland, which we covered with our standard product, they also required connections with some larger US banks.
Based on our experience in Europe, we saw no problem in copying the existing set-up and extending it to the USA. In PLAID, we also quickly found a reliable local partner.
But we were wrong. The banking system in the USA is fundamentally different to that in Europe. While there are mainly savings and transaction accounts in this country, the American system has a large number of other account types, all of which work slightly differently and, above all, generate different outputs.
It took several attempts and revisions before we were able to map all of the customer’s accounts correctly.
What we really like about PLAID is that, unlike PSD2 in Europe, it does not require re-authentication. Once set up, the connection is established.
One hurdle we encountered with PLAID was the fact that the data records are usually bundled per bank and per account holder – even if there are several different companies behind them. This required fundamental adjustments to our infrastructure, which was previously designed for 1:1 connections – as we knew it from Ebics. However, we were able to solve this and our customers can now see their US bank accounts linked to the correct company in Tresio.
We also noticed, in contrast to Switzerland where EBICS is a purely corporate product, that open banking in the US is interestingly driven by the B2C side. This means that although the interface providers offer thousands of banks, they have significantly better coverage in the private customer business than for companies.
How we are getting around this issue: the banks are setting up private access for corporate customers, which they in turn link to the corporate accounts. This workaround means that PLAID, and therefore ultimately TRESIO, still function correctly; therefore most treasury and corporate customer accounts can also be linked to Tresio. So far, the banks have been very cooperative in this respect.
If that doesn’t work either, there is always Plan C: we build customer-specific interfaces with the banks.
Initial experience with 1:1 connections
There are also banks that neither offer an Ebics interface nor are covered by one of the aggregators. For comprehensive cash management, it can still be important to connect these accounts as well. We are happy to check such setups for our enterprise customers on a case-by-case basis.
A recently completed example of such an individual interface is Bank Vontobel. Vontobel offers its institutional clients the option of automatically exporting Excel files with account transactions to SFTP Servers on a daily basis. In the current completed setup, TRESIO provides the SFTP server and Vontobel is responsible for the daily provision of the files with the correct information. The parsing and import takes place automatically and on a daily basis. The customer thus sees the transactions and account balances at Vontobel in the same quality as via a conventional interface.
Most of the larger banks also offer API interfaces. We are happy to assist with individual set-ups. Depending on the country, the prevailing legal provisions regarding any necessary licenses may apply – we are happy to look at this on an individual basis.
Conclusion
Open banking, open finance, multibanking – there are currently a lot of buzzwords in circulation and the topic is pretty hyped.
At its core, it is about a simple, but not so easy to implement basic need of every entrepreneur and financial manager: “I need to know at all times how much money is available to me at which bank, when, and in which currency, to ensure that I can meet my ongoing obligations”.
Treasury management – even if we generally avoid this term in our dealings with SMEs.
At Tresio, we now have a lot of experience in the field of multibanking solutions. We feel TRESIO stands out from our competitors in the market; primarily as we can offer our customers highly-customized solutions in addition to our standard products. In addition, thanks to our scalable technical infrastructure, we are generally attractively priced for medium-sized organizations compared to other treasury solutions.
We see ourselves at the beginning of the journey in the multibanking environment – the potential is immense and the needs of SMEs are still largely not covered by the solutions available today.
Try out Tresio and become part of this journey!
About Tresio
Founded in 2020, Tresio is an innovative startup based in Zurich with a mission to make finance departments in SMEs more successful. Tresio’s Financial Planning and Analysis (FP&A) solution is specifically designed for small and medium-sized businesses. Our offering includes comprehensive liquidity planning, scenario analysis and multi-banking, complemented by advanced analytics dashboards that integrate seamlessly with our users’ day-to-day systems. With a dedicated team passionate about supporting Swiss SMEs, we are continuously working to improve financial transparency and decision-making for our clients. Tresio stands for quality, innovation and empowering customer connections, values that characterize and guide us as a Swiss-based company.