Connecting via an API
APIs (Application Programming Interfaces) enable two applications to directly communicate with each other and exchange data. Nordea’s new Beneficiary Account Validation service works by connecting Wärtsilä’s system directly with Nordea’s, enabling the two to talk via an API and share data related to bank account validation. The content of the API query is automatically transferred by Nordea into a SWIFT message, which is then delivered to the beneficiary’s (i.e. the supplier’s) bank.
Jarmo says: “A few years ago, we tested the idea of asking our suppliers to send their bank account details to us themselves through a SWIFT message from their bank to our bank. That idea did not work out so this time we turned it around with the Beneficiary Account Validation approach and embarked on a co-creation process with Nordea instead. This time the idea involved sending a verification message via Nordea to the account holding bank with a message that says ‘these are the identification details of the company legal entity’ and then asking ‘does this bank account number belong to that company entity?’ ‘Please answer yes or no’. If the answer is ‘no’ then we would suspend the supplier account for any new payment and investigate further.”
The Beneficiary Account Validation service is now available to use for selected queries and in particular in the case of suppliers changing payment instructions or when a new supplier is added. Wärtsilä now sends a query to Nordea to validate information regarding the account the counterparty is indicating to use to receive the payment. Nordea then passes on the query to the supplier’s account holding bank via SWIFT messaging to request verification and confirmation that the account number is correct and genuine.
Jarmo adds: “APIs are not something new for us as we have been using them in other areas of our business. However, this possibility opened up as Nordea was at the same time thinking of other kinds of API digital services they could provide for corporates. Then we started to co-create to think together about how to address this problem. We have a digital workflow that automatically sends a message via the API to Nordea and they then pick up the request and start processing it. Of course this service is not relevant everywhere, but it offers us a very strong robust option for double checking information.”