Treasury Today Country Profiles in association with Citi

Bacardi

Bacardi Limited, Winner, Best SWIFT Solution

Photo of Mark Smith, Bacardi Limited.

Bacardi wanted to leverage SWIFT to standardise transaction formats, protocols and processes through a single, reliable platform. Given that its project and technical teams were based in the US, Bacardi further worked with its US bank to migrate its host-to-host connectivity to SWIFT for its APAC operations.

Photo of Mark Smith, Bacardi Limited.

Mark Smith

Vice President, Global Tax and Treasury

Bacardi Limited (Bacardi) is the world’s largest privately-held spirits company. Headquartered in Bermuda for more than 50 years, Bacardi sells more than 200 brands and labels of spirits and wines in more than 160 global markets, and operates 29 production facilities for bottling, distilling and manufacturing across 16 countries.

Host-to-host connection migrates to SWIFT in APAC

The challenge

As Bacardi grew its business in Asia Pacific, it built banking relationships and accounts in an increasing number of different markets, which limited the company’s visibility over cash as well as its ability to deploy funds effectively across the globe.

In 2016, Bacardi addressed the challenge by establishing a streamlined account structure and liquidity management solution which allowed the firm to consolidate its banking relationships and rationalise accounts across the region.

As a next step, Bacardi wanted to leverage SWIFT to standardise transaction formats, protocols and processes through a single, reliable platform. Given that its project and technical teams were based in the US, Bacardi further worked with J.P. Morgan to migrate its host-to-host connectivity to SWIFT for its APAC operations.

The solution

With the help of the bank’s deep expertise in implementing SWIFT connectivity, Bacardi was able to migrate its host-to-host connectivity to SWIFT through leveraging a secure financial exchange platform through SWIFTNet FileAct and applying the ISO 20022 XML standards. The solution enabled Bacardi to:

  • Initiate payments using PAIN.001 Credit Transfer message.

  • Receive confirmation reports in PAIN.002 Payment Status report format.

  • Generate automated end-of-day bank statements using SWIFT MT940 module.

Mark Smith, Vice President, Global Tax and Treasury explains, “Through a systematic project workflow and regular communications conducted between our global IT team in the US and the bank’s regional client service and implementation teams, we have successfully migrated our host-to-host system to SWIFT for our Global Treasury Team in Bermuda and three key markets in China, India and Australia, in just two months.”

Best practice and innovation

As part of its treasury transformation, Bacardi wanted to incorporate best in class solutions and practices to drive greater efficiencies. As the firm’s treasury, project and technical teams were based in the US, Bacardi worked closely with its regional banking partner to centrally manage the project from APAC and provide support from an advisory and implementation perspective.

Weekly calls were conducted between Bacardi’s global technical team in the US and the bank’s client service and implementation teams in APAC to confirm the scope and requirements of the system migration, before moving onto connectivity testing in a full user acceptance testing (UAT) environment. With a systematic approach and workflow in place, Bacardi was able to complete the implementation of SWIFT for its key markets in APAC within an aggressive two-month period.

“Two years ago we set a course to build a best in class global treasury organisation and winning an Adam Smith Award is both an honour and validation of our efforts to bring together the best of our technology, finance and treasury minds. This recognition reflects the team’s ability to work with both internal and external strategic partners to deliver innovative solutions and long-term value across our global business.”

As Bacardi further expands, the firm hopes to continue investing in new technologies and standardising treasury processes to streamline relationships with its banking partners in the region. By implementing SWIFT, Bacardi will be able to leverage a single platform to connect with partner banks across the region, minimising efforts and costs in maintaining multiple banking processes and systems.

Smith concludes, “This solution has generated increased treasury efficiencies for the firm and reduced costs associated with maintaining multi-bank relationships and systems. With these automated solutions in place, we are well-positioned to further maximise our treasury efficiencies as the business continues to expand in the APAC region.”

Key benefits

  • Reduced costs and effort associated with maintaining multi-bank relationships and systems.

  • Greater efficiencies by leveraging industry standard file formats across all existing regional and local banks.

  • Improved productivity, with an estimated 1,250 man hours saved annually.

  • Timely reconciliation and error-free processing of transactions through automation.

  • Increased security when initiating and transacting payments.

  • Centralised visibility across all accounts connected to SWIFT.

  • Reduced counterparty risks, with the ability to change bank relationships quickly.

Key learning points

  • As treasury and technology teams continue to deliver increasingly complex products, treasury project leaders need to listen and understand internal stakeholder needs and challenges in order to develop innovative solutions that are effective.

  • Treasury projects need senior level stakeholder support from technology, service delivery and finance teams in order to succeed. Active collaboration with key strategic stakeholders will assist in delivering win-win solutions, overcome technical or operational challenges and allow for innovation within the organisation.

  • It is vital that your strategic banking partner has a strong and flexible project management team. Challenging your bank throughout the duration of the project on blueprint and key timelines, will assist in both the implementation of a successful treasury solution and development of a stronger relationship long term.