Treasury Today Country Profiles in association with Citi

Clearsettle

Best Foreign Exchange Solution Highly Commended: Clearsettle

Thomas Leitch, TreasuryXpress and Alistair Cotton, Clearsettle

The company’s FX and liquidity challenges were highly complex and all revolved around volume, variety, and velocity. To ensure that it could build a solution that would help it in all areas of control, speed, and scalability, it worked collaboratively with TreasuryXpress to customise its cloud-based solution.

Photo of Thomas Leitch, TreasuryXpress and Alistair Cotton, Clearsettle.

Alistair Cotton

Treasury Manager

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Clearsettle is a global, cross-border payments processing and settlements company offering a solution for financial institutions and payment processors available through a single API.

in partnership with

Collaborative FX solution delivers impressive benefits

The challenge

The company’s FX and liquidity challenges were highly complex and all revolved around volume, variety, and velocity. Clearsettle receives around US$2.7m in transactions daily into numerous bank accounts across the globe. The ability to track and manage these transactions accurately and make real-time payments back to the merchants while managing its own FX and internal liquidity, was becoming more challenging every day.

Clearsettle did not have an efficient or centralised means to manage these transactions across more than 30 different banking systems. It knew it would soon be facing the perfect storm of high transaction volumes and FX complexity. Getting connectivity to its banks and achieving centralised visibility of its liquidity was critical. Equally important was finding a way to become more nimble and intelligent in how it managed its FX liabilities.

The solution

The C2Treasury TMS from TreasuryXpress enabled Clearsettle to create a controlled, centralised and auditable hub for managing liquidity and inbound and outbound payments processing. The final solution incorporates a number of special features including:

  • On-demand bank connectivity and centralisation.

    Using the cloud and API connections allows it to centrally manage all payments and every bank that the company and its clients work with.

  • Liquidity control and payment security.

    All payments now go through an intensified four-step process that also allows the firm to monitor all of its own liquidity in real-time across all of its bank accounts.

  • Currency matching and optimisation.

    Clearsettle has reduced FX trading and improved margins. Connectivity allows it to identify same-currency liquidity amounts that can be used to settle payments, eliminating the use of FX wherever possible.

  • ‘Smart’ FX trading and liability risk management.

    Its payments gateway pushes transaction information into the TMS which then collates and makes automated decisions on that information based on pre-defined FX trading rules and thresholds, automatically extinguishing its liability.

“Winning an Adam Smith Award is fantastic recognition for a lot of hard work over the last year not only from our team but also our service providers. All parties deserve praise for delivering a great solution and winning an Adam Smith Award is the highest praise you can get!”

Best practice and innovation

As a startup, Clearsettle did not have a treasury management system nor the budget and bandwidth of more mature operations. It was crucial that it put a solution in place that would keep pace with its projected rapid growth. To maximise its budget and minimise implementation resources, it needed a thorough plan that would deliver:

  • Flexibility and integrability of the treasury/connectivity solution.

  • Bank connectivity diversification and expertise.

  • Speed and ease of implementation.

  • Solution cost and scalability.

As a payments gateway and transaction facilitator, Clearsettle is unique. There was no single solution on the market that could support its need for broad connectivity, custom integration requirements with its FX trading provider and payments engine. Mindful of its USP, time-to-market was crucial. To ensure that it could build a solution that would help it in all areas of control, speed, and scalability, it worked collaboratively with TreasuryXpress to customise its cloud-based solution. This collaboration allowed Clearsettle to create a comprehensive API-driven solution.

Key benefits

  • Early adoption of treasury function bypassed many growing pains.

  • Centralised bank account management to improve payment and money-flow between purchasers, acquirers, banks, merchants and Clearsettle.

  • Improved short-term liquidity management.

  • Improved time-to-payment settlement.

  • Optimised FX trading and reduced liabilities.

  • Implemented structured payment workflows and risk controls.

  • Increased payment processing over 230% from US$300m to a forecasted US$1bn.

  • Forecasting an improvement of FX margins by around US$200,000.

Key learning points

We are a young company and the past 12 months were about putting in place very solid foundations to enable us to grow significantly over the next few years. Implementing a treasury solution at such an early stage of growth was unusual and difficult work but we are now reaping the rewards with higher levels of centralisation and automation. Our use of APIs allowed several systems to be combined early on and meant we could keep implementation and running costs down.

Portrait of Alistair Cotton

Alistair Cotton

Treasury Manager

Alistair Cotton is the Treasurer of Clearsettle. Before jumping into the fintech space, he worked for an FX brokerage managing their treasury function.

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