Treasury Today Country Profiles in association with Citi

Sanofi

Sanofi European Treasury Center, Winner, Best Risk Management Solution

Sebastien Jean, BNP Paribas and Wolfgang Weber, Sanofi European Treasury Center

Usually when one mentions risk management, one thinks interest and foreign exchange hedging. SETC is Sanofi Group In-House Bank deploying a payment factory model across the group entities and geographies with a target of worldwide coverage in more than 60 countries. SETC aimed at going beyond the role of a traditional payment factory by implementing a true Competence and Excellence Centre for payments whilst fulfilling the highest standards in terms of compliance, security and internal controls.

Photo of Sebastien Jean, BNP Paribas and Wolfgang Weber, Sanofi European Treasury Center.

Wolfgang Weber

General Manager and Head of Sanofi In-House Bank

Sanofi S.A. is a French multinational pharmaceutical company headquartered in Paris, France and as of 2013 the world's fifth-largest by prescription sales. The company employs over 110,000 people globally.

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The challenge:

The Sanofi European Treasury Center (SETC) is Sanofi Group’s in-house bank. Since 2013, SETC has deployed a payment factory model across the Group’s entities and geographies with a target of worldwide coverage (>60 countries).

SETC also aims to go beyond the role of a traditional payment factory by implementing a true Competence and Excellence Centre for payments whilst fulfilling the highest standards in terms of compliance, security and internal controls. However, a number of issues stood in the way of SETC achieving its goals, namely:

  • High complexity of organisation/activity in more or less all the countries in which Sanofi operates.

  • Involvement of many stakeholders in various functions/regions.

  • Multiple ERP platforms in the Group.

  • Additional related sub-projects to be managed in parallel: implementation of “restricted party screening” and central management of bank master data.

“The key risk related areas that we needed to address were improvements in terms of compliance, internal control and security. Besides that tremendous process efficiency improvements could be achieved. Through automation of processes which were (partly) done manually before, we are now less error-prone and can make better use of our resources within accounting and treasury teams throughout the organisation,” says Wolfgang Weber, General Manager and Head of Sanofi In-House Bank.

The solution:

There are two important pillars currently being implemented, which are directly related to the payment factory project and are tackling the risk-related aspects mentioned above.

The first is the centralisation of the bank master data management. This will enable Sanofi to be more efficient in its master data management by bundling all bank master data related workload in one central place. At the same time regular upload from a central data repository will lead to a cleaner database and consequently to fewer payment rejections due to wrong bank master data. Finally, a guidebook has also been created around country specific payment formats – this will serve the whole group as a single source of information for payment related questions.

The second pillar is a restricted party screening solution that is in the process of being put in place. This is developed in order to ensure that Sanofi does not enter into business with ‘blacklisted’ or sanctioned parties. This applies at both a master data (ERP) and payment factory level. In doing so, the group has improved compliance, avoiding potentially heavy fines and reputation damage, reinforced internal controls, and increased security on payment flows.

The bank master data project was carried out internally; whereas the restricted party screening implementation is undertaken with the support of a specialised team at Deloitte.

Best practice and innovation:

Usually risk management, conjures up thoughts of interest rate risk and/or foreign exchange risk and hedging. This innovative solution strengthens the role of SETC as Sanofi’s in-house bank, which, as a financial institution, can now take responsibility for better management of risks by: securing master data at group level and deploying restricted party screening to ensure the group entities are compliant with more and more complex and restrictive regulations.

As Weber emphasises, “compliance, highest quality standards and increased security are the key drivers of this project. Given a global environment where regulations and constraints become increasingly tighter, locating these tasks in the group payment factory and mobilising resources to build robust infrastructures brings additional added-value for the entire group.”

Key benefits:

  • Risk removed/mitigated.

  • Process efficiencies.

  • Productivity gains.

  • Reduction in bank charges.

  • Cost savings.

  • ROI.