Treasury Today Country Profiles in association with Citi

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BOEING, Highly Commended, Best Card Solution

Tracy Weidemann, Alex Lambie, Boeing and Steve Robson, Citi

Boeing has over 75,000 cardholders with cards in over 20 currencies generating $700m+ in spend globally. Hear how they deployed a virtual card account (VCA) programme with their banking partner to deliver some impressive benefits.

Photo of Tracy Weidemann, Alex Lambie, Boeing and Steve Robson, Citi.

Richard E. Williams

Director, Finance Services

Boeing is the world’s largest aerospace company and a leading manufacturer of commercial jetliners and defence, space and security systems. As America’s biggest manufacturing exporter, the company supports airlines and US and allied government customers in more than 150 countries and employ approximately 160,000 people worldwide.

in partnership with

The challenge

Boeing has over 75,000 cardholders, with cards in over 20 currencies and generates over $700m of spend globally. The company has long had a market-leading travel programme and wanted to enhance the commercial card programme further with a focus on value, compliance and cost effectiveness, and wanted to:

  • Reduce vulnerability to the risk of a potentially damaging data breach in order to meet regulatory requirements and internal targets for data security.

  • Improve ability to combat fraud in order to improve security and convenience for cardholders and meet a tight schedule for the industry mandate for chip and PIN card implementation.

  • Respond to intensified competition in both the commercial and defence aerospace markets in recent years by improving cash flow and working capital across all areas of the business, including suppliers and inventory, eliminating paper and maximising rebate potential.

The solution

To achieve this the company underwent an extensive, competitive proposal process. Citi ultimately won the business and together with Boeing have worked to bring a new level of success to the company’s card programme by implementing best practice across a range of areas.

Tokenisation

Tokenisation enables Boeing to meet and maintain stringent compliance requirements while reducing the overall cost and complexity of maintaining them and reducing overall risk. This works by transmitting employee cardholder data to Citi via a one-time, secure transfer process. Primary card account numbers are then replaced with randomly generated numbers which act as tokens. These tokens are then stored in Citi’s highly secure environment and Boeing will use the custom tokens within their expense and accounts payable systems in place of actual employee card account numbers.

“I believe it is important for service providers to know their customers. Boeing Travel and Expense Services is supporting our 160,000 employees around the globe. It is important that we provide card solutions that meet their needs 24/7. We have a very open and collaborative relationship with our bank. Our banking partner understands our strategies, not just for credit cards but also for Supply Chain Financing, Treasury Solutions and E-Payables. It is also important to share strategies and a partnership that develops solutions – not just for the near term, but also for the future.”

Fraud reduction

New cards have been issued and Boeing is also working with Citi to tailor additional fraud prevention measures. To do this Citi analyses the commercial card transactions of its clients to generate insights into fraud trends and improve the detection of unusual behaviour.

By partnering, Boeing and Citi are able to utilise adaptive behavioural analytics. This new functionality runs in conjunction with the security systems that are already in place. Analytics run in real time and spot minor changes on individual accounts, which will be used to detect existing fraud techniques and other potential threats. Deeper profiles that reflect the nuances of user data will be built as cardholders use their accounts, reducing the number of false positives.

Working capital analytics

To help enhance Boeing’s working capital, they and Citi have scrutinised supplier data which has revealed ample opportunity to move spend from cheques and automated clearing house (ACH) payments to virtual card accounts (VCAs), which are an electronic payment solution that generates a unique card number each time a transaction takes place, improving security and simplifying reconciliation.

Boeing has already implemented a pilot with selected suppliers, which achieved 50% adoption, and expects to migrate more than 1,000 suppliers with an estimated annual spend of $670m to VCAs in the first phase of the project by the end of 2016.

Best practice and innovation

“Boeing’s travel programme is already best in class, but by partnering for success with Citi and broadening the holistic relationship, we have extended our leadership across our commercial card programme,” says Richard E. Williams, Director, Finance Services at Boeing.

“Tokenisation reduces risk and achieves compliance while lowering costs; this is achieved without affecting our payment processing experience,” he adds. “New fraud detection measures will deliver additional security and convenience for cardholders; initiatives such as chip and PIN cards have already made a difference to cardholders’ experience and were put in place without disrupting business activity.”

Boeing’s adoption of an e-payables strategy for suppliers using VCAs puts them ahead of its peers, many of which still have paper-based processes. And by moving more spend to cards, Boeing will earn substantially more in rebate and gain a total net recurring benefit of over $25m a year from lower management, fraud and transaction costs, including elimination of cheque fees.

Key benefits

  • Risks reduced.

  • Compliant solution.

  • Enhanced customer experience.

  • Net recurring benefit of $20m+ per annum.

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