The challenge

Since GPI was introduced by Swift some years ago, Roche was attaching the unique end-to-end tracking reference (UETR) to its international cross-border payments. Despite receiving tens of thousands of feedback messages, a structured way to review this data never happened. Only in a few individual cases, the tracking information was manually reviewed in a cryptic way; since banks use the instructed SWIFT message format MT199, understanding what actually happened took time and presenting this information, for example, to the vendor, was impossible.

The solution

To support Roche’s shared services centre (SSC) being in charge of vendor payments as well as other group organisations with major payments (M&A, partnering and tax), the treasury team created a solution based on SAP cloud analytics, MT199 and pain.002 feedback messages. The project started with structuring and aligning thousands of messages received by different banks to build a front-end portal, which Roche can access, according to appropriate rights.

The simplicity of bringing available information into an analytics process allows the company to analyse: how payments are processed end-to-end; how long it takes until they are credited (and that they are credited); how long it takes until the correspondent banks process the company’s instructions and change the charges code, deducts charges or that FX rates include additional margins.

Although Roche reviewed individual payments on a request basis, it never had the full picture, prohibiting the company from reviewing data from diverse angles. Roche can now benchmark correspondent banks by their performance and compare which channel is faster or less costly, and whether charges were only applied by the vendor’s bank and therefore are not Roche’s responsibility. It is even possible to understand if vendors have received deductions but not advised Roche because the location of their account and invoiced currency required a cross-border payment.

Consequently, Roche understands the potential to further improve its accounts payable (AP) processes by ensuring correspondent banks with high charges are by-passed. Roche declines vendor claims when the company can demonstrate its bank deducted charges or used a FX rate which is off market. Roche’s procurement team was also granted access to the analysis to aid considerations over which vendors to approach to increase cash margins, by changing the location of its account, and re-negotiate existing deals.

“We provide SSC AP colleagues with access to the tool, using a simple PDF function, which allows them to pull a report for each transaction with the end-to-end view of payment, all involved banks, applied charges and confirmation of credit, in case vendors request details,” explains Stefan Windisch, Senior Cash Manager. Furthermore, Roche includes tracker ID UETR so vendors can track the payment themselves through their bank in case it is still being processed.

Best practice and innovation

The solution reduces the time required to review cross-border payments in question from an average of seven minutes in the SSC, five minutes in group treasury and additional time for banks to investigate and exchange via email, to only two minutes self-service for the SSC clerk. Roche doesn’t require any external provider for this solution as the company only activated and structured available information.

Overall, this portal solution has increased the company’s:

• Process efficiency and transparency in its SSC.

• Savings potential for group treasury to negotiate with its banks, correspondent banks and vendors to avoid deductions.

• Speed in the transactional process to send funds from Roche to vendors.

There is opportunity for further growth of Roche’s vendor payment analysis portal if the company can receive information directly from the SWIFT GPI tracker system, eg via API connection. SWIFT is internally discussing this potential; however, the main shareholders of SWIFT are banks and some of them have concerns over corporates directly accessing SWIFT databases, and are therefore currently blocking access. Roche will continuously promote its solution and team up with other corporates and banks who have less concerns gaining direct access to its payments’ information.

“We are in exchange with SWIFT, our banks and corporates, which hear us and understand the corporates’ need. I’m convinced there will be solution which will allow best access to information.”

Key benefits

• Cost savings.

• Headcount savings.

• Process efficiencies.

• Improved visibility.

• Errors reduced.

• Manual intervention reduced.

• Quality accreditation achieved.

• Improved key performance indicator (KPI) metrics.

“By making data available for multiple stakeholders, we have been able to increase transparency, trust and process efficiency. This portal solution demonstrates, how a centralised treasury organisation with a unified payment process generates value not only for themselves, but for multiple stakeholders within the organisation,” Stefan Windisch, Senior Cash Manager.