Photo of Karen Fagan and Richard Martin, Barclays.

ITV plc operates a business service centre which manages multiple bank accounts in approximately ten currencies. There was a great deal of manual processing involved in the day-today processing of treasury transactions and the confirmations process was extremely time consuming. International bank statements were sent by the different entities to the treasury department but this could be on a weekly or monthly basis. The company’s cash pool set up was also extremely complex, with a large number of varying balances on each of the accounts across the pool.

The company wanted to consolidate its cash position and sweep excess funds to zero balanced pool headers for each currency. The new cash pooling arrangement would allow the company to consolidate its bank accounts and improve its cash management structure. The company’s treasury team wanted to utilise technology in order to create a more efficient back office operation which was less reliant on manual processes. Their vision involved a more efficient bank account structure, utilisation of an in-house bank to record the zero balance transactions and settlement of inter-company invoices, straight through processing for payments, balance reporting (UK and overseas), bank statements for reconciliations, deal confirmations and accounting.

In addition ITV was looking to use internal data more effectively. Replacement of the treasury management system (TMS) was central to achieving these goals. The project was led by Bottomline Technologies with Barclays acting as the lead bank. With the help of its partners, ITV introduced a physically pooled operational banking structure with zero balancing alongside an in-house bank. To achieve this, ITV required a more integrated and secure method of sending payments, receiving confirmations from counterparties, accounting and to receiving statements from its banking partners. Barclays recommended SWIFT for Corporates connectivity and sponsored ITV so that it could become a SWIFT member.

SWIFT has delivered a number of ongoing benefits, including lower levels of operational risk and better daily cash and liquidity management thanks to the greater visibility ITV has over cash balances across all bank accounts. It is also providing the foundation for a number of planned additional treasury improvement initiatives that will yield significant future benefits for the company. “One of the major obstacles was to complete the SWIFT application process. However, ITV was able to draw upon Bottomline’s SWIFT expertise. This accelerated the application process, which ran very smoothly. Likewise, the change to zero balancing from a notional pool was completed with the assistance of Barclays Bank,” says Karen Fagan, Finance Manager, ITV.

As a result of this re-engineering project, the company has implemented a future proof environment using SWIFT connectivity that delivers the flexibility and scalability to increase the volumes processed without a significant impact on the back office treasury department. Benefits delivered include: more frequent and accurate reconciliations; increased straight through processing and reduction in outstanding items; improved data accuracy; and an almost complete elimination of un-reconciled items. It also provides the foundation for a number of upcoming treasury initiatives which will further improve efficiency, cost reduction and revenue growth opportunities for ITV.

“Internal backing and support from ITV management was critically important. Complete commitment to the project was also demonstrated by the secondment of two full-time ITV employees to the treasury initiative with additional resources used to backfill the vacated roles. This level of management support enabled the project team to remain fully focused on the SWIFT and treasury initiatives,” says Fagan.