Photo of Pavel Machacka, Citi, Irena Žáčková and Michaela Zelenkova, Euro-Center Holding SE.
With expansive operations, sometimes requiring urgent payments in exotic currencies, Euro-Center Holding faced mounting AP complexity. Here’s how it tackled the issues.
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Praha, Czech Republic
Euro-Center Holding (ECH) is one of the world’s leading medical assistance and claims handling service providers. A subsidiary of the Munich Re Group, ECH acts as a local gateway to a worldwide service and assistance network for travel insurance and assistance companies, annually processing over 210,000 cases around the globe.
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Bank consolidation reduces complexity and opens up process automation opportunities
Euro-Center Holding (ECH) services are provided via subsidiaries/contractual relationships located in 13 hubs across the globe.
ECH’s annual revenues doubled between 2011 and 2017, with over €100m made in annual payments to providers in more than 45,000 payment transactions executed in 55 currencies, including exotic currencies such as Zambian Kwacha, Samoan Tala and Swaziland Lilangeni.
As a result of growth, an efficient and flexible cash management solution was required. The key challenges ECH faced included bank relationship management, where cash management was fragmented, with transactions processed via eight different banks. Further, with more than 40,000 providers (hospital, clinics, air ambulance and others) across the globe, ECH initiates payments in 50+ global currencies.
In some emergency situations, such as covering the cost of an air-ambulance or in territories where the use of standard bank transfer is limited, ECH relies on online commercial card payments. In certain countries this exposed ECH to card fraud due to insufficient security features. Additionally, standardising and automating processes related to payment processing initiation, authorisation and reconciliation, while eliminating risk of fraud, presented a key challenge.
With ECH’s payments executed from 13 hubs across the globe, 24-7 access to funds for immediate payment initiation is key. Limited access to liquidity could result in failing to fulfil the obligation to the medical service provider and in turn put patients at risk. With no efficient method to ensure full value transfers and transparent FX and transaction costs, ECH faced further inefficiencies.
Considering its growth, ECH decided to fundamentally restructure the way its treasury centre operated. In 2015/2016, four banks were assessed and invited to the tender. Citibank Prague was awarded the contract.
With 13 ECH locations across the globe, all accounts are now held with Citi in the Czech Republic in single currency (EUR). All receivables are streamlined into a single Citi branch, enabling fully automated reconciliation. Disbursements are no longer processed via various bank accounts held in different global locations, they are also fully centralised in a single location.