The challenge:
Electronic banking (EB) has become an indispensable tool for many corporations; its prevalence is both a reflection, as well as a driver of, the transnational nature of many finance and accounting functions today. Finance and accounting processes (such as payments, receipts, payroll and tax) can be broken down into discrete pieces to be ‘farmed’ out to various shared services centres (SSCs) across different geographies. With the increased use and introduction of e-banking platforms, there is an often overlooked aspects in the initial stages of introducing such platforms.
EB setups will require security managers to be appointed; users with varying rights to be assigned and banking tokens (or access cards) to be issued to the users. The requirement appears simple enough, except that such tracking has to be performed across various countries, legal entities and functions.
“What became apparent was that we had to draw up a new process to manage the EB administration process,” explains, Helen Yong, Regional Treasury Manager at Honeywell Singapore. “Coincidentally, there was also a finance function centralisation project to move more finance functional processes into the SSCs that had been initiated at around the same time.” The overhaul focuses on two areas:
With over 1,000 existing EB users in APAC, rolling out new processes would not be easy and would require extensive communication, support and coordination.
The solution:
For each process, a flowchart was drawn, where the various functional roles and responsibilities were also identified. For added clarity, a RASIC (R-responsible, A-approve, S-support, I-inform, C-consult) chart was also drawn up. These two sets of documents were then circulated among the various stakeholders for discussion and buy-in. “There was constant discussion and revision to the planned processes as all relevant stakeholders had to agree to the new process, and in so doing accept the responsibilities that came with the new processes. With the support of the HR function, we had also included the return of EB tokens as one of the checklist items in the exit forms for employees who are leaving the company,” says Yong.
In the course of attempting to reduce the number of “instances”, the next question is how many “instances” will be appropriate?
After a thorough investigation, it was subsequently determined that three instances were needed:
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One View Only instance across all bank accounts – primarily managed by the treasury team.
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One Transaction Initiation instance to manage accounts payable (AP) (eg non-payroll, trade-related payments) handled by the shared services – disbursement team.
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One Payroll instance, managed by the HR team, given the confidential nature of such payments.
Best practice and innovation:
Though this project is internally focused, it relates to the management of operational risk in a sensitive area of the company’s financial supply chain, electronic banking (EB). As companies becoming increasingly dependent on EB systems, there is the risk that a company’s growth and expansion may occur without due consideration for its existing controls and processes.
“Our work in this area helps raise awareness among other multinationals on the importance of ensuring their EB systems are optimised to minimise operational risk and the potential for fraudulent activity,” says Yong. “A stitch in time saves nine, saving the stitch will save even more time.”
