Photo of Justain Bateman, HSBC and Sean De Silva, Sharjah Finance Department.

This is a collaborative solution between Sharjah Finance Department, its TMS provider and banking partner to deliver a comprehensive solution in the UAE.

Collaborative solution delivers for government entity in the UAE

The challenge

Sharjah Finance Department (SFD) wanted to strengthen the financial controls of the government through the migration of manual payment and cash management activities from various departments into a centralised treasury team.

SFD’s primary requirements were to obtain visibility over their cash positions across 250+ accounts with 16 banks; enhance their financial controls; optimise liquidity management and control their financial risk. The ultimate aim was to become more efficient and reduce their net cost of borrowing.

It became clear that SFD needed to leverage technology to significantly automate their operations and minimise reliance on the various manual processes that were in place to make payments and reconcile transactions in their general ledger.

The solution

The project started with an exercise to gather requirements, map the various manual processes being undertaken and collate an inventory of all of the bank accounts held by the various departments and other entities. HSBC stepped in to work with SFD on a request for proposal to choose a vendor that would provide a solution that could meet their current and future requirements alongside HSBC’s digital banking products. After reviewing a number of treasury management system providers, SFD chose to work with Kyriba.

Given the complexity of the requirements and the aim to achieve full automation, HSBC provided business process analysis as well as technical consulting to build a comprehensive bespoke solution in partnership with the treasury management system provider. Extensive collaboration with the project team from SFD, HSBC and the TMS provider resulted in an innovative solution combining many products and services utilising leading edge technology.

SFD has so far implemented HSBC’s digital banking platforms – HSBCnet for viewing their balances across banks; HSBC Connect, a host-to-host platform, which provides secure connectivity between the bank, the TMS provider and SFD. This has allowed SFD to receive consolidated electronic statements (MT940) from all of their banks and straight through transaction processing capability fully integrated with the TMS platform.

Best practice and innovation

The lack of bilateral agreements between banks in the UAE necessitated an innovative solution to enable SFD to concentrate all of their funds from various banks into the STA at HSBC. In agreement with the Central Bank of the UAE, the team devised a solution using the recently implemented UAE direct debit system. This now allows SFD to generate a same-day direct debit instruction to pull funds from accounts held at their other banks to HSBC.

In collaboration with their TMS provider the direct debit and wire transfer file formats (XML ISO 2022) were quickly developed and integrated into their payments module. They also developed a unique process to automatically generate payment and collection instructions based on previous end of day balances from the MT940s and cash flow forecasts minimising reliance on overdraft facilities and manual intervention.

“SFD has taken huge steps forward to embrace technology in automating our treasury operations. We are also unique in our use of the UAE Direct Debit system to pool funds to our lead bank in almost real-time,” comments Sean De Silva, Project Manager, Sharjah Finance Department.

Key benefits

• 70% of transactions are now processed electronically and SFD has gained full visibility over its cash and financial transactions.
• Processing times are significantly reduced (from days to seconds) and SFD has made significant operational cost savings which have more than offset the implementation costs.
• The scalable solution means that it can be rolled out across all of the government entities to further streamline.

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