The challenge

GEMS’ group treasury team was looking for a more enhanced view of the group’s daily total cash balances and the payments, seeking a real time view of global liquidity to inform investment decisions. GEMS overriding objective was to transform its treasury function and move to a more efficient and effective centralised treasury model that would integrate international markets in line with the company’s growth trajectory.

As a first step, GEMS’ treasury refreshed its existing ERP system. Following a comprehensive RFP, the company partnered with HBSC to begin its transformation process.

The solution

The solution involved rationalising and centralising treasury via creating a dedicated team responsible for managing the group’s cash flows, investment and risk management activities. This function was tasked with centralising all cash management processes, including bank account management, cash concentration and payment processing. Next the company drew up a comprehensive policy framework to ensure consistency and standardisation across all schools and business units within the group. The solution also involved rationalising banking relationships and moving away from multiple relationships, HSBC with its international reach, was selected as a single, core banking partner, able to open accounts across GEMS’ five markets.

Under a master profile in the UAE, the solution created a single login access available across all markets. Aligned to a fully centralised treasury structure, it gave improved visibility and control across geographies. The solution built robust bank connectivity and upgraded GEMS’ ERP to Microsoft Dynamics 365 for improved connectivity for cash management activities. This was integrated with HSBC’s host-to-host platform using treasury APIs connectivity and SWIFT MT940 to provide end-of-day statements for cash balance visibility. GEMS treasury now has real-time information on cash flows, bank balances and financial transactions for accounts with HSBC, transforming the efficiency and speed of its cash management processes.

In another initiative payment centralisation led to straight through processing (STP) with GEMS centralising all its payments through its existing payment factory set-up providing a single point of control for all payment transactions. Integrating the payment factory and ERP with the HSBC banking system using the treasury API modules, enables in-country payments files to be submitted through host-to-host connectivity with treasury HQ still having control.

Using standardised payment formats and implementing STP has automated payment processes from initiation to execution, optimising their operations and removing manual intervention.

Next, seeking a customised solution for cheque payments, GEMS used HSBC’s Remote Cheque Printing (RCP) solution. The company can now pass instructions from its payment factory where cheques are directly printed in the GEMS premises. A comprehensive reporting (standard and configurable) was provided through HSBCnet, enabling automated payment reconciliation across all markets. As part of the instruction, Payment Advising also delivers payment confirmations to nominated email address of recipients.

Best practice and innovation

Streamlining and enhancing GEMS treasury across multiple countries has been a significant undertaking for the company. It required investment in internal resources to push through and execute leading edge payments and digital solutions across its large portfolio of 60 schools in five countries. It also reduced the number of banking relationships, improved connectivity and optimised cash management structures.

Key benefits

• Rationalised relationships with a single core banking partner and simplified account structure – opportunity for GEMS to close 100+ accounts.

• Centralised treasury functions to gain visibility and control over accounts through the bank’s online portal.

• Provided an optimal liquidity structure with yield enhancement for surplus cash of an additional US$350,000.

• A Liquidity Management Dashboard provided real-time visibility of cash and reporting 24/7 with third-party bank reporting.

• Improved CFF accuracy, quality and consistency to become more efficient in its overall Treasury management.

• Introduced a centralised payment factory to automate and streamline existing payments processes.

• A future-proof system now uses an efficient connectivity solution of Treasury APIs integrated with ERP and bank host-to-host connectivity to make STP payments and automated matching to minimise manual reconciliation processes.

• Enhanced visibility, control and security of transactions, resulting in 24/7 real-time access to accounts.

• Further streamlined and automated receivables collections across all existing and new instruments through the use of Digital Cheque Scanners, Smart Cash Deposit Machines and direct credit of online receivables.

• Decreased administrative burden on employees and cost saves.