Photo of Illan Benemara, J.P. Morgan and Pierre Hautfenne, Umicore.

The global deployment of SWIFT has enhanced connectivity across the Umicore Group and served as the basis for the implementation of an efficient and best in class cash management structure globally.

Connectivity at the core of a successful treasury

The challenge

Umicore’s treasury team realised that its decentralised treasury processes and lack of XML standards was hampering the company’s ability to maximise liquidity, drive efficiency and support global business operations.

To address these issues, the team launched a global cash management RFP in 2017 with the goal of achieving enhanced visibility and fully automating the concentration of cash globally. In addition, treasury looked to rationalise its banking relationships around the globe to drive efficiency, reduce overall bank services fees and enhance controls and fraud prevention.

A further objective was to streamline bank communication channels by migrating from an electronic proprietary bank’s platform to SWIFT and enhancing the version of SAP used globally by the company’s subsidiaries. Implementation of the XML standard across all subsidiaries and countries was seen as crucial to achieve the desired efficiencies across the treasury organisation and make the final solution relatively bank agnostic.

The solution

Following the RFP process, Umicore selected J.P. Morgan to manage all the USD flows of the group globally and to implement a USD cash concentration offshore.

With this solution, all USD accounts of Umicore entities have been opened in a central location, at J.P. Morgan New York. The bank also provides local cash management services with liquidity structures in place in APAC, such as China, Korea and Thailand.

In terms of connectivity, Umicore migrated to SWIFT, integrating it with the company’s SAP system. The initial testing phase was streamlined by using the SWIFT MyStandards methodology.

The scope of the project included both SWIFT FIN (MT101 messages for treasury entity) and FileAct set-ups for payments and reporting (wires, ACH and camt.053 for prior-day reporting for all Umicore subsidiaries). A strong SAP integration work has been performed in order for all Umicore entities to seamlessly use the same version of SAP.

The SWIFT migration has brought a lot of benefits to Umicore, helping to secure, streamline and harmonise their processes as well as putting in place a standardised IT architecture globally across the group.

This is also the cornerstone to facilitate and support many treasury projects and future developments such as the implementation of a payment factory model.

Best practice and innovation

Umicore’s liquidity and cash concentration function has been truly optimised using today’s market standards and the latest file formats (ie XML). Umicore has also been able to deploy SWIFT in more challenging countries in Asia, such as China, which allowed the payments to be managed by the payment factory in China. As a result of this solution, treasury is better able to support the company’s global growth objectives and future developments.

From a technical perspective, Umicore has successfully achieved its goal of putting in place an automated and secure solution. The review of the connectivity set up with the global deployment of SWIFT is not only the enhancement of the connectivity for Umicore Group but this serves also as the basis for the implementation of an efficient and best in class cash management structure globally.

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