EBICS - Electronic Banking Internet Communication Standard

Corporate clients demand technologically forward-looking standard products which can be used for multi-bank payments. Multi-bank capability, i.e. the accessibility of all banks, is essential for the corporate client since it is the only means of sending payment instructions to several banks in a cost-effective manner. The payment transactions involved include not only credit transfers and direct debits but cover the whole spectrum of corporate customers’ cash management.

In 1995 it became compulsory for all German banks to comply with the Banking Communication Standard (BCS/FTAM), which thus established itself as the industry standard for corporate customer payment transactions. This means that for many years, German corporate clients have benefited from flexibility in their choice of a financial institution　- a situation largely unknown in many markets. The standard’s user neutrality regarding business transactions and data formats, together with its precise definition of the order types to be supported (e.g. MT940 account statements and later on the new XML-based generation), enabled several highly specialised applications (e.g. Multicash) to be developed for the exchange by corporate clients of BCS compliant payment transaction data files. It became apparent, however, that basing the BCS on the FTAM communication protocol did not lend itself to internet use.

For this reason, the German banking sector represented by Zentraler Kreditausschuss (ZKA) enhanced BCS/FTAM processes to make them suitable for internet-based use and built in some additional features such as the distributed electronic signature. The resulting EBICS (Electronic Banking Internet Communication Standard) was subsequently adopted by the ZKA and can be downloaded by all interested corporate clients, software engineers and banks. Many financial institutions and corporate clients started implementing EBICS voluntarily at the end of 2006 and since 2008 the standard has been mandatory in Germany.

The advantage of EBICS is that the basic BCS concept is retained: a data file exchange independent of message standards and formats using established digital signature and encryption procedures. Its features are based on international standards for internet communication and improved security (XML, https, TLS and SSL).

During the development of EBICS, care was taken to ensure compatibility with advances in international standards. Consequently, EBICS has the potential to become a European standard. SEPA data format payment transfers using EBICS only require the specification of a new order type. Account information, on the other hand, can already be provided using the internationally established MT940 format. EBICS is thus a major milestone on the road towards SEPA, able to guarantee the accessibility of all banks by means of a single communication technology throughout Europe.

On November 14th, 2008, a cooperation agreement was concluded between Germany and France on the application of EBICS. EBICS 2.4 is the first German-French EBICS version.

Since that, CFONB (French Committee for Banking Organization and Normalization) launched its project to support EBICS with the aim to discontinue the current secured communication protocol so called ETEBAC.

A Company (EBICS SCRL) for the advancement and maintenance of the EBICS standard has recently been established and the registration of trademark rights has been applied for. By joining the EBICS Company, other countries will have the opportunity to adopt the EBICS procedure, thus making it a European standard. News on the current schedule for EBICS can be found under the category Specification.　

The objective of EBICS SCRL is to extend the use of EBICS to other European countries and to further harmonise transactions, electronic authentication, and client-to-bank formats.

The advantages of using EBICS are

• A common standard for all banks and customers

• An open standard: Corporate customers can use standard (i.e. open source) or customised software

• State-of-the-art-technology, international standards like XML, https, TLS, ZIP

• Highest security protocol possible  i. e. encryption at transport and application level (end-to-end)

• Single access for all business transactions, i.e.  direct debits and credit transfers, account statements, cash management, securities and many others

• Support of third parties based on a multilevel security concept

• Location- and time-independent authorisation of submitted orders