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Best Cash Management Solution Winner: IATA

Published: Jul 2019

 

Photo of Stephen Darnley and Javier Orejas, IATA and John Murray, Citi.

IATA

Spain

The International Air Transport Association (IATA) supports aviation with global standards for airline safety, security, efficiency and sustainability. It has approximately 290 members worldwide in 181 countries. IATA Financial Settlement Systems (IFSS) are a key player in the global air transport industry. They enable the swift, reliable, and efficient movement of funds between airlines and their travel partners. In 2018, the IFSS had settlement volumes of US$466bn.

in partnership with

IATA leverages CPI to transform payment transparency for the global aviation industry

The challenge

One of the greatest challenges for the airline industry is lack of payment transparency and certainty. Many payments made to IATA members are cross border. Frequently, users would have their account debited but be unclear when the payment had reached the beneficiary.

As a result, members had to call or email the relevant bank, which was a complicated and time-consuming process. On other occasions, correspondent banks that were part of the payment chain might deduct fees from transactions, meaning the beneficiary would receive less than the intended amount. There was no easy way of understanding or identifying the banks that had deducted such fees or even establishing the amount received by the beneficiary.

Exception handling and investigations into delayed or other problematic payments were manual, time-consuming (often taking several days to resolve) and cumbersome for all involved – ultimately, they increased costs. These problems risked damaging airlines’ relationships with their travel partners.

The solution

IATA wanted to address these challenges and decided to become a pilot client for Citi Payment Insights (CPI), a new service providing institutional clients with real-time payments visibility, and the ability to action payments on-demand via CitiDirect BE. IATA also intends to use CPI with ISO XML files via its host-to-host connectivity in the future.

Using a unique identifying reference number, CPI empowers clients by providing a complete view of the transaction lifecycle within Citi’s global network, and across the correspondent banking ecosystem by integrating the transparency provided by SWIFT’s gpi initiative.

CPI’s enhanced visibility is available in 70 markets and includes processing status, processing timelines, charges deducted across correspondent banks, and the amount credited to the beneficiary.

It is an honour for IATA to be awarded with a prestigious Adam Smith Award, especially in recognition for the Best Cash Management Solution as it shows at industry level that IATA is at the forefront of best practice and innovation in the cash management arena.

IATA team

Best practice and innovation

The solution went from a concept to a live solution in less than a year. Its rapid implementation timetable was achievable because of the long-standing strategic relationship between IATA and Citi. Clear communication between them ensured that IATA’s priorities and concerns were front of mind.

CPI leverages banking industry advancements like SWIFT gpi and the latest technologies such as APIs, cloud computing and big data. It replaces a payment system that was time-consuming and ineffective, relying on lengthy, manual and paper-based investigation processes between banks to resolve problems associated with payments.

Rather than calling Citi in relation to payment problems, clients can now trace their payments using an intuitive product that is comprehensive, simple to use and delivers the kind of ease and convenience expected in today’s app-based world.

Key benefits

IATA’s CPI solution offers airlines instant access to real-time payment status including rejects and returns, charges deducted across correspondent banks, and the amount credited to the beneficiary. Users can see incoming payments before a credit is posted into clients’ accounts.

SWIFT messages and branch signatures can be saved, printed or sent via email to support on-demand proof of payment. The solution allows users to provide debit authority online, when a remitter recalls funds posted to a client’s account; and enables beneficiaries to return credits that are not recognised.

Real-time information facilitates improved cash forecasting, working capital management and liquidity management. The solution has also delivered a significant reduction in email enquiries from IATA members associated with payment tracking, investigations or proof of payment. Overall, processes that in the past could have taken several days can now be completed in as few as two or three clicks.

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