Photo of Kevin Braeckman, PwC with Geert Wouters and Anje Reybrouck, DEME

The challenge

The challenge was simple: overhaul a sub optimal payments and treasury process that relied on fragmented technology leading to inefficiencies and operational risk, particularly regulatory and sanctions risk. The company sought to end all manual payments processes and bring in central oversight, visibility and control.

The solution

DEME improved visibility and control over outgoing payments and eliminated the risk of payments to third parties on sanctions lists by introducing a centralised payment system to replace the 45+ different electronic banking systems it used to initiate payments supplemented by a separate sanctions screening tool. The new payment system was connected to the external banks via one central communication channel, being SWIFT. At the start of the project, DEME was working with over 60 different banking partners worldwide and had over 1,000 bank accounts. Since it would have been impossible to implement the new centralised payment infrastructure with such a high number of banks, DEME rationalised its bank partners, reviewing all bank accounts and closing non-critical ones.

DEME decided on a central SWIFT connection. In order to maximise the control over outgoing payments, the company also decided, wherever possible from a legal and tax perspective, to replace local foreign currency payments by payments-on-behalf-of (PoBo) out of central treasury accounts, supported by daily inhouse bank account statements, reflecting the intercompany positions, delivered throughout the group.

DEME linked the new central payment infrastructure to a sanctions screening tool to screen all outgoing payments against the latest sanctions lists before transmission to the external banks. The new central payments and sanctions screening system infrastructure was rolled out to all countries where DEME has legal entities, including complex and highly regulated areas such as Russia, Africa, Latin-America, the Middle-East and Asia. The new payment infrastructure is currently live for 150 entities of the group spread over 38 countries. Payments are initiated and approved in the local ERP systems and send to the bank without any manual intervention. A PoBo solution has been implemented in 14 countries (across Europe and APAC) and for 60 entities where possible from a tax and legal perspective. The company has achieved automated daily visibility on over 95% of all cash across the group using the new centralised banking connection via SWIFT. The new TMS offers a full end-to-end solution from transaction execution to automated accounting. It also enables DEME to automatically keep track of all intercompany positions coming out of the PoBo set-up. The new implemented treasury infrastructure has cut costs by reducing the number of payment systems and bank accounts, renegotiation of banking fees, conversion of foreign currency payments in domestic payments and reduced interest expense by centralisation of cash.

Best practice and innovation

In a period of about four years, DEME transformed and expanded its treasury function from a fragmented and standalone system landscape, with suboptimal processes and limited visibility on cash, into a fully integrated system architecture, adding payment factory for its worldwide entities, screening outgoing payments against sanctions and maximising straight through processes. It moved from more than 1,000 bank accounts to currently less than 600 (the reduction is still ongoing) and from more than 60 bank relationships to eight key banking partners around the globe.

Key benefits

• Cost savings.
• Process efficiencies.
• Increased automation.
• Risk mitigated.
• Improved visibility.
• Number of banking partners/bank accounts reduced.
• Manual intervention reduced.
• Increased system connectivity.
• Future proof solution.