What Is SAP Bank Communication Management?

SAP Bank Communication Management, in combination with treasury modules such as Bank Relationship Management, Advanced Payment Management, In-House Banking, and Multi-Bank Connectivity, offers a centralized platform that plays a vital role in handling banking relationships and transactions. It ensures that all financial activities are accurately reflected across the company’s accounts.

Since the release of SAP S/4HANA 1809, SAP has introduced significant enhancements in the area of payment processing. These changes enable companies to centralize complex local payment workflows more effectively. This article provides a structured overview of Bank Communication Management and its key functionalities.

It is important to mention that SAP Bank Communication Management is an older solution available in SAP ERP, and it continues to be available and recommended for monitoring payments, particularly within local systems (if you use multiple systems in your payments landscape). SAP Bank Communication Management provides organizations with the tools to manage their bank transactions, streamline bank communication, and ensure accurate reconciliation of payments.

However, advanced payment management is gradually overtaking many of SAP Bank Communication Management's capabilities, offering a more centralized solution for managing payments across the organization. Advanced payment management brings the much-anticipated ability to centralize payment processes in one system, improving efficiency and providing better oversight. However, both advanced payment management and SAP Bank Communication Management are designed to work together seamlessly as part of the overall payment processing architecture in SAP.

Advanced payment management is primarily responsible for the incoming and outgoing side, where it handles functional approvals, validations, and initial processing of payment files or payment instructions. Once the payments have been functionally approved and processed through advanced payment management, the responsibility is handed over to SAP Bank Communication Management, which serves as the treasury-level control point.

SAP Bank Communication Management is used for final payment approvals, liquidity checks, and the release of payment files to banks. After the payment has been released, the payment medium is created in the target format by the advanced payment management and passed directly and seamlessly to the SAP Multibank Connector, which sends the encrypted file to the bank.

This structured handover between advanced payment management, SAP Bank Communication Management and Multi-Bank Connector ensures strong governance, segregation of duties, and compliance, while also supporting a smooth and secure end-to-end payment process.

At the same time, it's important to note that SAP is actively working on new payment concepts and evolving its payment architecture. In the future, the usage and integration of advanced payment management, SAP Bank Communication Management, and other solutions may change or become more unified, depending on SAP’s development direction. Organizations should remain informed and adaptable as these solutions continue to evolve to meet changing business needs and industry standards. After reading these chapters, you will see how advanced payment management and SAP Bank Communication Management are integrated and complement each other within the end-to-end payment process.

The following is an overview of the concept of SAP Bank Communication Management, its main functionalities, and its role in the overall payment landscape:

Payment Processing

SAP Bank Communication Management streamlines and automates the payment process by consolidating payment instructions from different SAP S/4HANA areas such as AP, AR, treasury, SAP In-House Cash/in-house banking, and payroll.

Payment Formats

SAP Bank Communication Management supports a wide range of payment formats and ensures that payment batches are securely transmitted to banks over an connected bank connector like SAP MBC through approved communication protocols, including SWIFT, host-to-host, and other secure channels.

Payment Approvals

The system allows for payment approval workflows, providing a robust level of control and visibility into outgoing payments.

Payment Statuses

SAP Bank Communication Management offers detailed tracking and auditing features, ensuring all payment statuses—from initiation to settlement—are readily available, thus improving transparency and compliance.

Bank Statement Processing

SAP Bank Communication Management also facilitates the automated import and processing of bank statements. With own Monitors for monitoring end of day and intraday bank statements SAP Bank Communication Management ensures full visibility if all expected bank statements are imported into the system. SAP Bank Communication Management supports multiple formats, such as MT940, BAI2, CAMT, and others.

Once imported, the bank statements are automatically reconciled with open items (whenever rules are configured and automatic matching could be performed) in SAP, significantly reducing manual intervention and errors. The system can identify discrepancies, allowing finance teams to resolve unmatched items promptly. This automation speeds up the month-end-closing process and provides real-time visibility into cash flow, liquidity, and overall financial health.

In today's corporate payments landscape, managing multiple banks can be highly complex, with multiple banks used (see figure below). SAP simplifies this by centralizing payment workflows, reducing errors, enhancing security, and ensuring real-time synchronization of financial data.

This decentralized approach can be unified through proper bank communication channels and SAP Bank Communication Management. One of the standout features of SAP Bank Communication Management, as with advanced payment management and Multi-Bank Connectivity, is the connectivity functions, which streamline treasury operations by allowing corporations to execute payments, monitor transaction statuses, and receive bank statements through a single interface.

However, connecting with multiple banks often requires various interfaces and technologies, sometimes necessitating a proprietary interface for each bank. The effort needed to maintain these interfaces can lead to high costs and manual labor, with yearly expenses for a banking interface ranging from $10,000 to $50,000 (a rough estimate, depending on many factors). These costs encompass not only the interface itself but also ongoing maintenance, training, testing, and updates.

SAP Bank Communication Management’s robust payment approval process plays a critical role in maintaining control over financial operations, subjecting all outgoing payments to rigorous verification. Batch processing capabilities further enhance efficiency, allowing organizations to manage large volumes of payments, which is common for businesses with a global footprint. SAP Bank Communication Management’s comprehensive reporting and audit trail features also provide the transparency and traceability needed to manage complex banking structures and ensure compliance with regulatory standards.

Within organizations, there have been instances of attempted manipulation of payment files. The process of sending these files to the bank often involves multiple people and significant manual work, with unencrypted files sometimes stored in easily accessible directories. Having multiple bank connection interfaces means that staff must either be familiar with all of them or specialize in a few, leading to inefficiencies.

Furthermore, current communication methods do not allow real-time status tracking of files, causing errors to be detected too late, which can result in additional fees and postprocessing costs. The signature verification process, required by banks before executing any payment order, introduces extra manual steps that delay payments. Moreover, for each bank, companies must designate a group of staff members who are authorized to send payment files, adding another layer of complexity.

This figure shows how SAP Bank Communication Management can help you to centralize your payment landscape.

Using both SAP ERP and SAP S/4HANA, a payment file is generated with the help of the payment program (Transaction F110 or F111). Once generated, the file is downloaded to a file server and then uploaded to a third-party system responsible for managing the transmission of files to and from the bank. Within this system, the file undergoes an authorization process, in which staff members log in to verify that an accompanying document matches the file total. If the verification is successful, they proceed to sign. Once the required number of approvers (typically two) has signed, the system sends the file to the bank. The bank then verifies that the signatures match those on file for the company's authorized approvers before executing the payment.

Banks also send files such as account statements to companies. These are received and decrypted by the third-party system, which acts as a central hub for collecting statements. In many cases, it converts the SWIFT message type 940 (SWIFT MT940) message into a format such as a statement.txt or lineitem.txt file. A staff member then retrieves the account statements and uploads them into the appropriate systems.

SAP Bank Communication Management eliminates the need for separate interfaces for each bank by providing direct access through the SWIFT network or any other bank connectivity options. SAP Process Integration or SAP Integration Suite (the newer cloud solution) play a critical role in linking the SAP S/4HANA system to the SWIFT network. SAP Bank Communication Management facilitates the transmission of a company's financial transactions with banks, including services for creating, sending, and tracking payment orders, as well as receiving bank statements. SWIFT operates a global financial messaging network that ensures secure and reliable exchanges between banks and financial institutions.

Bank Connectivity

Although SAP Bank Communication Management helps you to build a unified and centralized connection and to centralize the processing of all payments, it doesn’t provide any bank connectivity options itself. You still need to build and choose the bank connectivity option that best fits your needs. This solution can serve as a best practice approach to establish secure and streamlined bank connections.

This figure shows the core processes of SAP Bank Communication Management.

• Payment run: The starting point for the SAP Bank Communication Management process flow is the execution of the payment run, which involves processing payments for open invoices using dedicated payment methods. This step ensures that all outstanding invoices are cleared and payments are made accordingly. In SAP ERP and SAP S/4HANA, payments are executed through Transaction F110 for invoices and Transaction F111 for payment requests. For cloud versions, the payment run is carried out through the Manage Automatic Payment app (F0770). This functionality is available in both the SAP GUI and SAP Fiori interfaces, depending on whether the organization is using the on-premise or cloud version of SAP S/4HANA, allowing for seamless integration and efficient processing of payments across different system environments.
• Batching of payments: This process groups payment runs into batches, allowing for easier management. Payments can be grouped based on customizable rules, such as vendor, payment methods (to differentiate between urgent payments that need to be executed immediately and domestic payments that can be grouped into multiple runs), payment origin (such as bank-to-bank transfers, which can be autoapproved, or vendor payments requiring payment approval), or specific value ranges (e.g., to differentiate approvals based on amounts, such as autoapproval for payments up to 50,000 USD or the equivalent; other currency payments would be translated into the USD amount), with, for example, all payments above 10 million USD requiring CFO approval.
• Approval of batches: Once batches are created, designated staff members approve them. Payment media are only generated after the final approval, significantly reducing the potential for unauthorized payment file manipulation. Digital signatures also support internal audit processes.
• Payment file generation: Due to security reasons, the payment file (the type of payment file generated is determined by the configuration) is only created once the payment is fully approved in SAP Bank Communication Management. Once generated, it is stored in a dedicated folder and immediately sent to the bank. The main purpose of this is to ensure that no one can access or modify the file in any way.
• Storage of files: All outgoing and incoming files are stored in a dedicated folder on the SFTP server, to which no one should have access. The middleware solution should pick files from this folder and send them to the bank or store files received from the bank. SAP jobs should have access to these folders to process the incoming files received from the bank.
• Status tracking: SAP Bank Communication Management tracks the status of payment orders from initiation to execution by the bank, provided the bank sends status messages. This feature highlights errors and allows for the customization of automated alert workflows.
• Bank statement monitor: This process gathers information from the SAP Integration Package for SWIFT and the SAP ERP or SAP S/4HANA system, allowing for real-time visibility of bank statement imports and processing.

By utilizing a single interface to connect with banks, SAP Bank Communication Management simplifies payment processes. When integrated with SWIFT, SAP Bank Communication Management also supports the Universal Financial Industry (UNIFI) standards defined by the International Organization for Standardization (ISO), with Single Euro Payments Area (SEPA) standards being a subset of UNIFI.

Editor’s note: This post has been adapted from a section of the book Payment and Bank Communication Management with SAP by Adrian Matys and Jean-Michele Szczecina. Adrian is an SAP finance professional with more than 10 years of experience. Jean-Michele is a subject matter expert in the areas of payments and cash management at Zanders.

This post was originally published 7/2025.