ERP Systems Face New Compliance Challenge as Banks Enforce Structured Payment Data
Companies using IFS Cloud and NetSuite are facing a growing compliance burden as banks worldwide begin enforcing stricter requirements for payment data under the ISO 20022 standard. A new partnership between Nordic ERP services firm Addovation and payments connectivity provider Cobase aims to help businesses meet these evolving demands without overhauling their core systems.
The Regulatory Shift
The move towards structured payment addresses is being driven by Swift and the European Payments Council (EPC), who are phasing out unstructured data in favor of dedicated fields for address information. While the original implementation deadline has been postponed, many banks—particularly in Europe—are already enforcing stricter rules that require at least town and country to be included in structured format for all international payments.
The ERP Data Challenge
The problem lies primarily within corporate ERP systems, where supplier and customer master data often contains unstructured addresses. As Fredrik Wingren, chief revenue officer at Addovation, explains: “Banks expect more from the payment data your ERP sends them, and the rules keep changing.”
This challenge is compounded by the Verification of Payee framework in Europe, which requires banks to verify payee name against account number before authorizing transfers—another area where accurate data originates in the ERP.
The Solution
The Addovation-Cobase partnership offers a layered approach:
- Companies retain their existing IFS Cloud or NetSuite systems as the core business platform
- Cobase acts as a connectivity layer, normalizing payment files and bank statements into each bank’s required format
- Addovation Engage provides implementation and ongoing management services
“We don’t think one platform should try to do everything,” says Wingren. “The ERP stays at the core, Cobase handles the connection, and we ensure it all works together.”
Competitive Landscape
While established treasury management systems and bank-direct connections offer similar capabilities, Addovation and Cobase differentiate through their extensive global bank network, robust address validation tools, and focus on rapid implementation for mid-market customers.
To help companies assess their readiness, Addovation is offering a 30-minute structured-address assessment that identifies gaps in supplier records and clarifies applicable deadlines—a service particularly valuable given the varying enforcement timelines across different banks and jurisdictions.
As businesses navigate this evolving compliance landscape, recognizing that ISO 20022 compliance extends beyond bank connectivity to encompass ERP data quality will be crucial for maintaining smooth payment operations.
Tags
- iso-20022
- erp-compliance
- payments
- europe
- digital-transformation