Most companies using Microsoft Dynamics 365, whether Business Central or Finance & Operations still rely on file-based bank processes.
Payments are exported. Files are uploaded. Bank statements are downloaded and imported manually.
It works.
But as transaction volumes grow and complexity increases, these manual steps quickly become a bottleneck.
So what’s the real difference between file-based and direct bank integration — and when should you make the shift?
What is file-based bank integration?
File-based integration is the traditional way of handling payments in ERP systems like Dynamics 365.
A typical workflow looks like this:
- Payments are created in the ERP
- A payment file is generated
- The file is uploaded to the bank portal
- Bank statements are downloaded
- Data is imported back into the ERP
Why companies use it
- Works with most banks
- Easy to get started
- No advanced setup required
Where it breaks down
- Manual steps create errors
- Time-consuming for finance teams
- Limited visibility
- Approvals often happen outside the ERP
It’s manageable early on — but difficult to scale.
What is Direct Bank Integration?
Direct bank integration connects your ERP directly to your bank.
No files. No portals. No manual steps.
Payments and bank data flow automatically between your system and the bank through a secure connection.
👉 Learn more:
https://amcbanking.com/direct-integration/
What changes with Direct Integration?
Instead of handling files, finance teams can:
- Execute payments directly from the ERP
- Automatically receive bank statements
- Get real-time visibility into transactions
- Keep approvals inside one system
It removes friction — and gives full control.
How approvals work (And why it matters)
One of the biggest shifts is where approvals happen.
With file-based processes:
→ approvals typically happen in the bank portal
With direct integration:
→ approvals happen before payments are sent — inside your system
That changes everything.
Built-in control with the 4-eye principle
Approval workflows follow strict security standards:
- Payments require multiple approvers
- No single user can approve payments alone
- New approvers must also be approved by others
This ensures:
- strong governance
- reduced fraud risk
- full control over payment execution
Because the communication is secure and cannot be manipulated, payments are effectively pre-approved before reaching the bank.
Secure communication behind the scenes
Direct integration is built on secure communication between your ERP and the bank.
When a connection is established:
- Encryption keys are exchanged
- Access is tied to specific users
- Approval rights are securely managed
This ensures:
- Data cannot be altered during transmission
- Only authorized users can approve payments
- All actions are controlled and traceable
Security is not reduced — it’s strengthened.
File-Based vs Direct Integration: Key differences
| Area | File-Based | Direct Integration |
|---|---|---|
| Process | Manual files | Automated flow |
| Speed | Slower | Faster |
| Risk | Higher | Lower |
| Visibility | Limited | Real-time |
| Approvals | In bank portal | In ERP |
| Scalability | Limited | High |
When File-Based starts to hurt
File-based processes usually work — until:
- Transaction volumes increase
- You work with multiple banks
- You operate across countries
- Reconciliation takes too long
- Approvals slow things down
At that point, the process becomes the problem.
What about bank coverage?
A common concern is whether your banks are supported.
Modern solutions support a wide range of banks and formats — making it possible to standardize processes globally.
👉 Check supported banks:
https://amcbanking.com/banks/
Why Direct Integration is growing fast
Direct bank communication has existed for years.
But adoption is accelerating due to:
- PSD2 regulation, enabling secure bank access
- Better technology, improving speed and reliability
- Increased need for automation in finance
Today, finance teams don’t have to choose between efficiency and security.
They can have both.
Which approach is right for you?
File-based integration may be enough if:
- You have low transaction volume
- You work with few banks
- Your processes are simple
Direct integration is better if:
- You are scaling
- You handle multiple banks or countries
- You want to automate reconciliation and payments
- You need stronger control and visibility
Conclusion
File-based integration is where most companies start.
Direct bank integration is where they go when they need to scale.
The difference isn’t just technical — it’s operational.