Photo of Alexander Van den Heuvel, Royal DSM.

Alexander Van den Heuvel

Group Cash Manager

Richard Erven

Dealer Front Office

Ernst Janssen

Digital Treasury Manager

Royal DSM is a global, purpose-led company in health, nutrition and bioscience, applying science to improve the health of people, animals and the planet.

Royal DSM swaps manual process for automated FX solution in hedging programme

The challenge

Royal DSM sought root and branch automation of its FX hedging programme. Group treasury at the company runs a short-term FX trading programme to ensure DSM’s different companies and units can internally hedge their open currency positions.

In a time-consuming and often manual process, staff copy and paste information from TMS to Excel; determine which exposures need to be hedged, and then trade those exposures. Manual processes include saving and renaming all deal slips. DSM has on an annual basis about 5,000 trades via FXall with approximately ten relationship banks. For nearly all trades in FXall, the leading currency is EUR but the leading currency is USD for only six out of the 27 currencies.

DSM had already implemented a robot, RPA, for internal FX processes within its Financial Shared Service (FSS) Organisation in Hyderabad, India.

The solution

DSM introduced end-to-end automation of its entire short term FX processes via the FXall multibank platform and its partner WIPRO with benefits across front, mid and back office.

The end-to-end automation encompasses autonomous log into FXall including multi-factor authentication. It allows treasury to enter specific trades, including or excluding counterparties for some currencies. The facility also allows treasury to choose its preferred house bank when quotes are within a certain boundary to avoid additional bank charges. DSM was also the first company to successfully implement optical surface recognition on the FXall platform.

Best practice and innovation

Treasury operations at DSM are increasingly data-driven and the department prides itself on being a frontrunner for digital innovation. The latest innovation sits within a broad strategy to make repetitive activities as efficient and effective as possible – despite restrictions due to its current SAP system. The innovation has improved compliance and also saved time – for example, it saves the front office 25 minutes a day.

Treasury has already introduced sweeping automation in its payments and daily balance processes. For example, the company now channels over 90% of its payments through a payment factory on top of its existing IHC/IHB capabilities in a process that has improved quality and compliance, saving time across all offices.

Particularly innovative aspects of the solution include autonomous login to FXall and the ability to enter trades that apply ‘logic’ to include or exclude specific counterparties for some currencies. The facility also allows DSM to choose its preferred house bank when quotes are within a boundary to avoid additional bank charges. According to Refinitiv, DSM Group Treasury was the first company to successfully implement this instance optical surface recognition facility in FXall.

Key benefits

• Cost savings.
• Process efficiencies.
• Return on investment.
• Increased automation.
• Risk mitigated.
• Manual intervention reduced.
• Increased system connectivity.
• Future proof solution.