A critical first step in the transformation project was the creation of the new in-house bank, as well as the implementation of the single-entity multicurrency notional pool. This enabled the establishment of a formalised netting and settlements policy, as well as a more focused, centralised approach to the company’s FX risk management decision-making.
In doing so, Wyndham has undertaken a treasury transformation programme which includes optimising the company’s liquidity management structure, putting in place a netting programme and improving FX risk management practices. It has now achieved realtime visibility over its global cash balances as well as real-time access to liquidity held by various legal entities around the world.
During the project, the company has worked with various counterparties, most notably Bank of America Merrill Lynch (BofAML), and has implemented technology provided by Kyriba and Reval.
Best practice and innovation
Despite having a team of only two EMEA-based treasury professionals at the time, Wyndham has successfully undertaken a highly ambitious project replacing the legacy outsourced IHB with a more flexible and innovative solution managed internally, a project normally reserved for large corporations. Wyndham’s treasury team, however, identified an opportunity to overhaul existing processes and technology. And while the timeline for the project may have appeared challenging at the outset, the highly disciplined approach, weighing up different potential approaches and making strategic decisions quickly and effectively, meant the team was able to meet its original deadlines.
Overall, the project has allowed Wyndham to put in place a scalable structure which will enable the company to make the best use of internal cash in order to move forward with acquisitions when required. In addition, given the company’s acquisitive nature, the new in-house bank also provides a plug-and-play vehicle to absorb future M&A integrations.
Meanwhile, risk was also reduced and yields were enhanced. “We’ve seen significant improvements in our FX Scorecard metrics. Coverage levels are in tighter tolerance to policy. And by going through the exercise of extracting exposures from the ERP systems, we have found and corrected cases where FX exposures were incorrectly reported and calculated,” notes Cassidy.