In April 2008, The Thomson Corporation acquired Reuters PLC for $17 billion creating the world’s leading provider of intelligent information to professionals with revenues of $13 billion. The creation of Thomson Reuters resulted in a global organisation with multiple banks in many regions, including two core banks in the UK and two in Continental Europe.
Photo of Rweyunga Kazaura, Standard Chartered, Arun Abraham and Stuart Corbin, Barbara Harrison, Citi and Cara Hanrahan, J.P. Morgan.
Arun Abraham
European Deployments Director, GBS Operations
Stuart Corbin
International Treasurer
Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world’s most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 55,000 people and operates in over 100 countries. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com
in partnership with
Following the unification of its structure in September 2009, the new entity was keen to consolidate its banking relationships worldwide for its accounts receivables and payables, treasury services and liquidity.
As a result of a tender process in Q4 2009, Thomson Reuters selected five core banking partners in Q1 2010. The selection exercise facilitated the consolidation of their disbursement banking relationships across 78 countries to just three core disbursement banks – Citibank in EMEA and Latin America, J.P. Morgan in the US and Standard Chartered Bank in Asia Pacific.
Stuart Corbin explained “The consolidation of Thomson Reuters’ disbursement bank account network formed part of a wider project to streamline all accounts globally and extend our liquidity sweeping structure. From a banking footprint of over 1,700 accounts with 135 banks in 99 countries, we are in the process of closing 523 bank accounts which will result in the number of banks being cut to 57. Approximately 90% of our transaction processing is now routed through our 5 core banks selected via the RFP process. Overlaying this network internationally is our zero-balance sweep structure which has been expanded by approximately 180 additional sweeps in order to further automate the centralisation of cash.”
As Arun Abraham states “With this framework in place, a key piece of the go-forward banking partner interaction infrastructure was the standardisation of the Accounts Payable payments process facilitated by the deployment of the XML ISO 20022 payment format.”
“Our standardisation imperative led to the formulation of a goal of having a single global bank-independent inbound and outbound format for payments.”
This deployment was a catalyst to standardise master data items, such as vendor master and payment method definitions in SAP, thus facilitating easier reporting as well as usage analysis to validate billing as well as enabling the adoption of SEPA credit transfers.
Arun commented “Our standardisation imperative led to the formulation of a goal of having a single global bank-independent inbound and outbound format for payments.”
The accounts payables solution, is based on the three principles of standardisation, automation and straight through processing, and comprises the following elements:
- All payment processing for 78 countries, from 237 disbursement bank accounts enabled within a single instance of SAP.
- Existing bank specific, country specific payment formats to be replaced by a standard definition of the bank independent XML ISO 20022 for 92% of their disbursement bank accounts, across 67 countries. (Approx. 8% of total disbursement bank accounts across 11 countries cannot be migrated to XML ISO 20022 as they involve relationships with non-core banks that need to be maintained for various reasons).
- Payment file transmission to their banking partners to be automated via host-to-host connectivity and file consolidation capability enabled to minimise file transmission fees.
- Payment files encrypted to minimise risk of fraud.
- Payment (summary and detail) acknowledgement monitoring to be enabled within the SAP environment by way of a ‘bespoke’ message centre plug-in.
- Maximise the automation of payments by minimising cheque payments or by enabling the outsourcing of cheque printing.
The implementation of XML ISO 20022 commenced in March 2010 with all three of the Thomson Reuters primary disbursement banking partners.
The first deployment with Citibank in September 2010, covered France and The Netherlands, chosen because these countries were deemed to be non-complex implementations with lower volumes and a single banking partner. Subsequent releases were scheduled every two months, so that 161 disbursement bank accounts (68% of total bank accounts) across 34 countries were migrated, comprising 91% of total payment volume.
Stuart Corbin concludes “finally, to ensure that our payments infrastructure is subject to continuous improvement, we have agreed key metrics with our banks, which are reviewed on a regular basis. These metrics help identify instances where straight-through-processing is diluted so we can carry out the appropriate process related or data related remediation in a timely manner. Account receivables will follow in the second half of 2011.”
