The challenge

Wearnes maintained 36 accounts across six entities in a variety of different operating currencies.

Maximising yield on investable cash is a major priority for Wearnes. As such, the company is constantly looking for good investment opportunities. Considering this, Wearnes noted it was maintaining multiple idle surplus balances in four major operating currencies and realised these could be invested in order to generate additional income streams for the organisation.

While Wearnes wanted to invest these funds to enhance yield, the company wanted to avoid investment products that required a lock-in period for placed funds to optimise working capital by ensuring funds could remain readily accessible to meet the business needs. Additionally, due to the company’s lean treasury set-up, Wearnes identified its ideal investment solution would be one that minimised the manual effort on creating instructions for placement, monitoring and withdrawal of funds to and from suitable investment options.

The solution

Wearnes worked with its banking partner, HSBC, to increase yield on surplus funds via HSBC’s Liquidity Investments Solution (LIS) offering. Through this, Wearnes can set rules-based sweeps on its banking platform, HSBCnet, that automatically sweep surplus liquidity into investment accounts held with a variety of third-party money market fund (MMF) managers. Via HSBCnet, Wearnes is also able to dictate which MMFs cash should be placed in, effectively providing the company with a high degree of choice on where it chooses to invest funds on a single platform.

Proceeds on invested funds can also be automatically swept back to Wearnes’ operational accounts according to sweep parameters that are also set on the banking platform, allowing Wearnes to automatically redeem funds once a certain value of returns has been met. As there is no lock-in period for investments placed in LIS, Wearnes can effectively place and redeem funds as and when they are needed, providing the company with a high degree of flexibility on investment. All investment reports are also received solely through HSBCnet, providing efficiency on reconciliation.

To provide additional flexibility on process, the solution also allows Wearnes to self-direct trades as and when required. This capability allows the company to seize time-sensitive opportunities as they arise.

“Altogether, this has created a fully automated investment process, that has provided us with a high level of flexibility on how and when we choose to invest our surplus funds. This allows us to realise greater returns on surplus liquidity, with minimal effort needed in placing and monitoring funds,” explains Katherine Tan, Group CFO.

Winning the Adam Smith Award Asia raises the bar of treasury’s contribution to an organisation.

Katherine Tan, Group CFO

Best practice and innovation

Investments are managed centrally on HSBCnet, which is the same platform that Wearnes uses to monitor cash positions for accounts regionally on a real-time basis. The greater visibility on balances and seamless investment experiences the solution has accomplished has driven more robust decision making on investment, while reducing administrative burden.

Funds in Wearnes’ HSBC accounts can be swept to and from investment accounts automatically according to rules set centrally on HSBCnet. This has eliminated the need for manual fund transfers to investment accounts on other platforms. Additionally, no paperwork is required to create fund deposit or withdrawal instructions, driving further efficiencies.

Through the range of investment options available, as well as the two process flows that are provided for Wearnes to execute investments, Wearnes is able to both generate passive income streams through automated investment execution and withdrawal, while also capitalising on sudden opportunities as they arise.

Key benefits

• Process efficiencies.

• The solution has managed to generate US$3.6m of returns to date.

• Increased automation.

• Risk mitigated.

• Improved visibility.

• 100% elimination of manual intervention on investment through the sweep-based investment process, driving significant efficiencies on investment process of eight hours saved a month.

• Exceptional implementation (budget/time).