Treasury Today Country Profiles in association with Citi

SWIFT

SWIFT, Highly Commended, Treasury Today’s Top Treasury Team Award

Luc Janssens, Deutsche Bank, Magda Jasinska, SWIFT, Clotilde Mandonnet, J.P. Morgan and Patrick Holemans, SWIFT

In just 18 months, a small team of five professionals defined and delivered an ambitious roadmap to transform SWIFT’s treasury operations, covering all key areas, including cash management, FX, payments and inter-company funding. The accomplishment of this ambitious project stands as a tribute to the power of technology and innovative thinking and is worth the recognition it has achieved here.

Photo of Luc Janssens, Deutsche Bank, Magda Jasinska, SWIFT, Clotilde Mandonnet, J.P. Morgan and Patrick Holemans, SWIFT.

Patrick Holemans

Treasurer

SWIFT is the Society for Worldwide Interbank Financial Telecommunication, a member-owned cooperative through which the financial world conducts its business operations with speed, certainty and confidence. More than 10,800 banking organisations, securities institutions and corporate customers in over 200 countries trust SWIFT every day to exchange millions of standardised financial messages. It also brings the global financial community together to work collaboratively to shape market practice, define messaging standards and debate issues of mutual interest with a view to developing collaborative solutions.

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The challenge:

SWIFT’s treasury operations are handled by a small, five person team in Belgium, which is responsible for more than 80 accounts in 25 countries and 18 currencies. As a result of SWIFT’s rapid geographic expansion with new offices in the Americas, Asia and Africa, the treasury team found itself facing an array of additional complexities on top of its already challenging workload. Despite rapid integration of the new locations into existing internal processes, the team was confronted with an increasing number of manual exception procedures in key areas such as payments, cash management and foreign exchange.

The manual treasury processes lacked efficiency and an end-to-end audit trail, and increased the risk for human error. The problem proved to be most acute in the payments area. To complicate things further, no link existed between SWIFT’s SAP ERP system and the various banking applications, because security concerns dictated that they be connected to different networks.

Manual processes to upload payment files and to enter individual instructions put a strain on precious treasury resources and staff. At the same time, rapidly increasing FX volumes resulting from the expansion into emerging markets, and the need to comply with EMIR (European Market Infrastructure Regulation), meant that existing front- and middle-office processes needed a complete overhaul. All combined, these factors called for the implementation of a new technology solution.

The solution:

In response to these challenges, the SWIFT treasury team defined an ambitious treasury roadmap. The roadmap is part of SWIFT’s internal ‘continuous improvement’ programme and addresses all the complexities and inefficiencies identified by SWIFT, and would lead to the implementation of an innovative technology solution from a number of partners.

The initiative’s priorities were decided cooperatively by a team vote. The highest priority components were tackled in a compressed 18-month time frame. The overall project included the use of SWIFT’s Alliance Lite2 solution to send payments directly from SAP, using a single channel for all banks and accounts. This was achieved in close cooperation with SWIFT’s treasury banking partners including J.P. Morgan Chase and Deutsche Bank.

The project included the following other components:

  • In-house developed ‘cockpits’ – on-screen visual representations – which enable the treasury team to monitor the status of payment request approvals, payment deliveries to banks, and bank statements uploaded to the ERP system. These powerful tools were designed to help users react quickly if a file becomes ‘trapped’ somewhere in the system.

  • A layered approval mechanism was developed. It was designed specifically to allow authorised approvers to be notified of relevant transactions by e-mail. This means that users are now able to check and approve payments remotely, removing the frustration of any delays (on both sides of the transaction).

  • An integrated SAP payments request portal was developed. This portal allows authorised users to create requests regardless of payment type (whether for payroll, tax and others). The portal is fully integrated with the layered approval mechanism mentioned above, which means there are no unnecessary delays for payment requests.

  • All staff worldwide have access to the tools to manage payment requests according to defined standard processes, whether at SWIFT’s headquarters or from a remote office. This also ensures that correctly generated payment requests can be expedited with maximum efficiency across the enterprise.

  • FX front- and middle-office processing has now moved to the online trading platform, FXall. This has markedly reduced the time spent by treasury staff when trading and matching confirmations, and has also helped SWIFT comply with EMIR regulations.

  • On the cash management side, the MyTreasury money market funds (MMF) portal was introduced. The deployment of this solution has accelerated treasury investment decisions while simplifying back office processing.

  • An integrated SAP in-house cash module was developed. This module allowed the payment of inter-company invoices through in-house cash accounts, integration of external cash pool movements on internal bank accounts, generation of internal bank statements and automated remuneration of accounts.

Best practice and innovation:

In an 18-month period, a small team of five professionals defined and delivered an ambitious roadmap to transform SWIFT’s treasury operations, covering all key areas, including cash management, FX, payments and inter-company funding. The primary focus of the project was to streamline payments processing.

All payments across the group, covering 25 countries, were centralised in a single system that provides full straight through processing from back office to bank. Furthermore, the team went on to simplify inter-company invoicing and settlements through an in-house cash structure, and introduced dealing platforms and optimised processes to save time trading and matching FX deals and money market investments. The continuous use of latest technology makes SWIFT’s treasury initiative stand out as best practice in the industry.

Various providers contributed to SWIFT’s treasury initiative including SAP with its in-house cash module, FXall and MyTreasury with their dealing platforms, and SWIFT with our Alliance Lite2 solution. The deployment of various tracking cockpits – all developed in-house – has vastly improved the status monitoring of payment request approvals, payment delivery to the banks, and bank statement uploads to the ERP system. Overall, the new system has significantly improved processing efficiency and the traceability of payments by minimising the number of manual transactions and providing a layered approval mechanism with a fully auditable trail of activity.

Comment:

The SWIFT treasury team engaged in an ambitious initiative – both in terms of in scope and timing – to transform its treasury operations. This project, encompassing cash management, foreign exchange, payments and intercompany funding, saw SWIFT move away from its predominantly manual, independent and time consuming processes and head towards a set of fully integrated, straight through processes befitting the new level of treasury complexity and the global stature and systemic importance of SWIFT itself.

The treasury project drew on many of the techniques and recommendations of SWIFT’s internal ‘continuous improvement’ programme, which clearly set out to foster a culture of process improvement to which everyone in the organisation contributes. The project was successfully completed in a highly compressed timeline by a small team of five staff. The project stands out with its best in class technology and innovative processes.

Key benefit takeaways:

The focus on standardisation and application of new technologies has allowed the SWIFT treasury team to achieve the following key benefits:

  • Reduced operational risk.

  • Significantly improved process efficiency.

  • Improved traceability of payments by minimising the number of manual transactions and providing a layered approval mechanism with a full audit trail.

  • Simplified inter-company invoicing and settlements through an in-house cash structure.

  • Introduced dealing platforms and optimised processes to save time trading and matching FX deals and money market investments.

  • Lowered total cost of ownership (TCO).

  • Achieved critical cost savings.

  • Facilitated compliance with financial regulation.

The project roadmap was developed entirely by the SWIFT treasury team in response to the company’s priorities and best industry practice.

Photo of Luc Janssens, Deutsche Bank, Magda Jasinska, SWIFT, Clotilde Mandonnet, J.P. Morgan and Patrick Holemans, SWIFT.