Emirates, Highly Commended, Global Liquidity Management

Published: Aug 2011

Over 2009/10, Emirates concluded a vital project replacing its legacy back office system with Oracle on a global basis. Building on the success of this project, Emirates’ launched a Request for Proposal (RFP), followed by a methodical and value driven evaluation process that allowed the company to consolidate myriad banking relationships to three global banks.


Photo of Robin Terry, HSBC, Swati Mitra, Citi and Martin Runow, Deutsche Bank accepting on behalf of Emirates.

Brian Jeffery

SVP Corporate Treasury

Michael Doersam

SVP Finance

A fast-growing international airline with one of the youngest fleets in the sky and more than 400 awards for excellence worldwide, Emirates is one of two key corporations in the Emirates Group. Since its beginning in 1985 Emirates has evolved into a globally influential travel and tourism conglomerate. Growth has never been lower than 20% annually and the airline has recorded an annual profit every year since its third in operation.

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The regional mandates allowed Emirates to leverage the best from its banking partners and yet, from a collaborative and industry perspective, allowed cutting-edge technology (eg the use of harmonised xml ISO 20022 standards) and product innovation. Specifically, the payables solution has streamlined Emirates’ process flow, significantly improving efficiency and reducing manual intervention, effectively leveraging Emirates’ existing investment in its Oracle system.

The liquidity solutions put in place have created a single pool of liquidity within each of the three banks across Emirates’ 60 finance centres and increased its interest income as a result. The solution provides yield enhancement to Emirates’ operating balances in every country based on its aggregate balances with each bank – irrespective of the level of balance in any individual location.

The liquidity solution ensures that the daily interest accrual and liquidation processes followed in each of Emirates’ locations are retained, with local Emirates operations continuing to receive their standard reports (but gain better yields). At the same time, Emirates head office receives customised interest optimisation reports that show how the group has benefitted from the solution. Emirates’ objective of reducing its bank relationships in respect of payments transmission services from 50+ to just three banks globally (with a very limited number of local exceptions) is ambitious and unprecedented for a Middle East company. It ran a rigorous RFP process to achieve this goal, including an unusually detailed proof of concept stage that provided a genuine insight into the competing banks’ capabilities.

“The liquidity solutions put in place have created a single pool of liquidity within each of the three banks across Emirates’ 60 finance centres and increased its interest income as a result.”

Brian Jeffery comments “Through our thorough approach, Emirates gained a global payment solution that has transformed our processes, and by using XML – another first for the Middle East – is future proof. The liquidity solution is equally innovative for a Middle East company and delivers automated interest optimisation across multiple countries.”

Emirates’ rapid geographical expansion in recent years prompted the company to address its financial network. In response to the challenges, Emirates launched an accounting and financial system using Oracle covering 60 locations more than two years ago and fully completed the project in January 2011.

Michael Doersam states “One goal of that project was for Emirates to enhance the bank element of its outstation work in order to automate as much functionality as possible and to address the risk management across the network. Emirates recognised that achieving this goal was complicated by having relationships with 50 banks worldwide, which consequently led to the RFP. Liquidity management hitherto was addressed on an ad-hoc/manual basis, and though effective, put significant strain on internal management and resources, as the world’s fastest growing airline continued to expand.”

The liquidity solutions implemented by Citi, Deutsche Bank and HSBC in the regions for which each was mandated, deliver interest optimisation globally in a fully-automated manner. Implementation of the payables solution began with legal and contractual work before moving onto implementation of the IT solution. The payables solution began with three pilot finance offices in April before the anticipated 12‑ to 18-month global rollout begins in June.

Brian Jeffery concludes, “We set up a Steering Board that monitors progress on a regular basis. The banks’ and Emirates’ project team report into that Board. Documentation was handled on a global basis, thereby paving the way to ramp up implementation quickly across a strategically chosen ‘route’ ie. on a hub/satellite model, with the larger countries/hubs in every region being implemented first.”

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