Bank connectivity for TCSPs

Connectivity is a recurring challenge for Trust and Corporate Service Providers (TCSPs). A firm may work with a long tail of banking partners, each with different channels, formats and workflows.

Consider a typical manual payment and bookkeeping process:

1. A payment request is created in an administration system, workflow tool or document.
2. The request is reviewed and approved under the TCSP's control framework.
3. An authorised user enters or uploads it through the bank's channel.
4. The bank applies its own authentication and approval workflow.
5. A statement is later downloaded and entered into the administration system.
6. The ledger is reconciled against the bank record and exceptions are investigated.

Expand that process across hundreds or thousands of entities and their bank accounts.

A secure, automated connection for payment instructions and statements can remove several manual hand-offs. The appropriate connection depends on the bank, account type, jurisdiction, volumes, timeliness and control requirements.

Look beyond headline coverage

Search for multi-bank connectivity and you will quickly find claims about Open Banking coverage alongside SWIFT services. The headline number is not enough: a provider may technically reach a bank without supporting the institutional account, payment workflow, data fields or jurisdiction a TCSP needs.

Open Banking in the UK and PSD2 in Europe may form part of the answer, but neither provides universal institutional-bank connectivity.

Why Open Banking and PSD2 may not cover the TCSP use case

Open Banking can be useful where the relevant account, bank and provider are in scope. It should not, however, be treated as universal institutional-bank connectivity.

• Consent and authentication still need operating processes. In the UK, customers no longer have to reauthenticate with their bank every 90 days for account-information access, but they do need to reconfirm consent with their Account Information Service Provider every 90 days. In the EU, the PSD2 technical standards generally moved the renewal of strong customer authentication for qualifying account-information access from 90 to 180 days. These are different requirements, and neither removes the need to manage authority over client accounts.
• Account coverage matters. An API may support retail or business payment accounts but not the private, corporate or institutional accounts used for particular client structures.
• Jurisdiction matters. UK Open Banking and EU PSD2 rules do not automatically apply to banks or accounts in offshore jurisdictions.
• The workflow may still be incomplete. Account information, payment initiation, approval mandates and bulk-payment processing are separate capabilities. Confirm each one rather than relying on a single coverage figure.

For many TCSPs, Open Banking can therefore be one part of the connectivity mix rather than the whole answer.

Compare the connectivity options

1. Direct bank connections through SSH File Transfer Protocol (SFTP)

SFTP uses the Secure Shell (SSH) protocol to provide an encrypted file-transfer channel between a TCSP or its technology provider and a banking partner. It is commonly used for scheduled statement delivery and payment-file exchange.

For an administration platform or workflow tool, SFTP can be a practical way to automate controlled file exchange with a banking partner.

• Pros: Well suited to scheduled, high-volume statement and payment-file exchange; compatible with controlled batch workflows.
• Cons: Initial configuration and testing are bank-specific; file delivery is normally scheduled rather than event-driven; monitoring and key management must be maintained.

2. SWIFT

SWIFT provides standardised financial messaging and reach across more than 11,500 connected entities. Its current Alliance Cloud service is hosted and managed by SWIFT, reducing the internal infrastructure and maintenance required compared with traditional on-premise connectivity.

• Pros: Broad reach, standardised messaging and a single route to multiple participating institutions.
• Cons: Onboarding, eligibility, bank agreements, integration, controls and commercial costs still need assessment. Direct participation is not the only model; service providers may offer indirect routes.

3. Bank APIs

Some banks offer APIs for corporate or institutional clients, although capability and access vary by bank and account type.

APIs can exchange individual requests and responses rather than scheduled batches. Where the bank supports it, this may provide more timely balance, transaction or payment-status information.

• Pros: Potential for real-time data and automation.
• Cons: Coverage, authentication, data models, rate limits and approval workflows vary; integration may be bespoke.

Practical recommendations for TCSPs

• Start with requirements, not firm size: Document the accounts, banks, message types, volumes, timing and approvals you need to support.
• Engage banks early: Ask each banking partner which production channels and formats are available for the accounts in scope.
• Compare total operating effort: Include onboarding, testing, monitoring, exception handling and change management — not just the connection fee.
• Use technology providers where appropriate: A specialist integration or administration platform may be able to manage bank-specific differences behind a consistent workflow.
• Apply proportionate controls: Encryption, credential and key management, segregation of duties, audit trails, monitoring and tested recovery procedures should match the risks of the connection.

Choose the mix that fits the workflow

Open Banking and PSD2 are not a universal answer for TCSPs, especially where institutional accounts or offshore jurisdictions are involved. A pragmatic connectivity strategy may combine different routes:

• SFTP for controlled batch exchange;
• APIs where the required institutional services are available; and
• SWIFT where its reach, standardisation and operating model justify the investment.

Find the right connectivity mix

Talk to us about the banks, accounts, formats and workflows your firm needs to connect.

Explore your options