ITV had a complex cash pool structure with a large number of varying balances on each of the accounts across the pool. As such, the company wanted to consolidate its cash position and sweep excess funds to zero balanced pool headers for each currency. The new cash pooling arrangement would allow the company to consolidate its bank accounts and improve its cash management structure.

Karen Fagan

Finance Manager

ITV is the largest commercial television network in the UK. It is the home of popular television from the biggest entertainment events, to original drama, major sport, landmark factual series and independent news. It operates a family of channels including ITV1, ITV2, ITV3 and ITV4 and CITV which are broadcast free-to-air on analogue (ITV1 only), Freeview, digital satellite (Sky/Freesat) and cable. ITV is also focused on delivering its programming across multiple platforms including itv.com, video on demand on cable television and other ‘closed’ platforms, mobile devices and games consoles.

Problem

The company’s treasury team wanted to utilise technology in order to create a more efficient back office operation which was less reliant on manual processes. Their vision involved a more efficient bank account structure, utilisation of an in-house bank to record the zero balance transactions and settlement of inter-company invoices, straight through processing for payments, balance reporting (UK and overseas), bank statements for reconciliations, deal confirmations and accounting. In addition ITV was looking to use internal data more effectively. Replacement of the treasury management system (TMS) was central to achieving these goals.

One of the key motivating factors behind the change-over was the fact that the treasury had a labour-intensive payments processing and accounting system in place for treasury transactions. Although the data was already in the existing TMS, it still had to be input manually via the treasury’s internet banking terminal and manually input into the ERP system (Oracle). With a new TMS, a payments file could be created and the data could be fed seamlessly to the banking system and processed automatically, significantly reducing human error and improving security and control. Also all accounting could be interfaced into the group’s general ledger in Oracle. To address these issues, the company was looking for a solution that could be integrated with its new TMS and could be configured to meet any specific requirements. ITV turned to Barclays Bank to assist it in overcoming this challenge.

Solved

Barclays, ITV’s main relationship bank, proposed SWIFT Corporate Access as a solution to ITV’s problems. “Initially, we believed SWIFT for Corporates would be expensive, especially when we took into consideration the number of payments we made,” admits Karen Fagan, Finance Manager at ITV’s Business Service Centre. “But Barclays was able to assure us that the price had come down significantly and that it would be an ideal solution for delivering flexibility and functionality. We held a workshop with our payments and treasury teams, facilitated by PwC’s treasury consultancy, who were assisting the wider project. We were looking for a future-proof system and we realised that if we moved to SWIFT, as well as getting our bank statements in, we could look at improving our payments, bank reconciliations and deal confirmation process,” says Karen.

The company also engaged a SWIFT service bureau to assist with the project. “We started looking at different bureaux and eventually went with Bottomline. We wanted seamless, straight through processing (STP) so it was important that the people we involved in the project had existing relationships themselves. This was the case with Barclays, Bottomline, and Wall Street Systems, and has meant the integration has run very smoothly.”

Introducing SWIFT Corporate Access has delivered a number of benefits to ITV. These include only having a single treasury platform to maintain and achieving high levels of automation and STP. “As the team arrives every morning, all the payments information is waiting for them. The new SWIFT system has also allowed the treasury to make a number of efficiencies, and has even reduced the amount of human resources required for back office processing, meaning that staff can be transferred onto more value-added tasks,” explains Karen. The treasury has also saved on the time it takes to input and validate information, reducing the treasury month-end timetable from five days to two. These efficiencies have been consolidated by enabling the TMS system to ‘talk’ directly to SWIFT through the new bureau, which in turn communicates with Barclays and allows the treasury to conduct its banking processes in an efficient, integrated manner.