Streamlining Bank Account Data for Enhanced Cash Visibility
By Garry Beardshall, Treasury Manager, Ravenscroft Group
Wanting to get a better handle on its daily cash positions, Ravenscroft Group has implemented a solution with TreasuryXpress to enable the efficient collection of SWIFT MT940 reports, feeding them straight into Ravenscroft’s in-house trade management system. The TreasuryXpress implementation has also removed 90% of paper-based bank account reconciliation processes, freeing up significant time and resources for more value-added tasks.
Ravenscroft Group (Ravenscroft) is an independently-owned investment services group with offices in Guernsey, Jersey and the UK. Today we employ more than 100 people and have £6.5bn of assets under administration for both private and institutional clients.
As a financial firm, Ravenscroft must adhere to the client money rules described in the UK Financial Conduct Authority’s (FCA’s) Client Assets Sourcebook (CASS) – for client monies in the UK. We also extend those same rules to our operations in Jersey and Guernsey, since this is the direction of travel of regulation, and safety of client monies is paramount.
Our aim as a company is to build the leading Channel Islands-based investment services firm through exceptional customer service, integrity and accountability. To begin our journey towards this goal, we knew we first needed to go back to basics and review our processes – especially around financial flows.
Starting from scratch
When I joined the company three years ago, there was no distinct treasury function and, as such, there was a lack of visibility over bank account balances. We also learned that client monies traditionally sat on the balance sheet of the custodian. With so much pooled money being left with one institution, we knew we wanted to improve counterparty diversification.
The decision was therefore taken to establish a formal treasury function at Ravenscroft and we set up a network of banking partners, which were primarily located offshore. We also built our own trade management system in-house, which could be customised to suit our needs and provide a competitive edge.
Once we started to trade using the system, however, we quickly realised that the bank account reconciliation process was becoming burdensome, as our banking partners used a variety of different formats to send us account information. We urgently needed to find a way to resolve this, and the obvious answer was to use the SWIFT MT940 message format.
With a preferred message type settled on, we wanted the ability to self-clear investments but initially found ourselves doing everything manually. This was through a combination of spreadsheets, services from financial business solution firm Pershing, and the in-house system. The scale of the manual effort here cannot be underestimated – we were manually uploading and aggregating almost 200 bank statements daily, including interest flows, which took over three hours per day to accomplish.
Integrating external treasury technology
The challenge we faced was to work out how to collect all the SWIFT MT940 data in an efficient way. Once we identified our goals and began our research, we discovered TreasuryXpress on LinkedIn and connected with their team to discuss our needs.
Through an initial conference call with the team at TreasuryXpress, the software developers and our front office and back office, we were able to explain what our issue was and what we were looking for. We also had our in-house cybersecurity expert in this initial meeting, who was able to ask a number of questions on the security aspects of the project – this was vital given the nature of the business that we work in and the fact that we were looking to integrate our in-house trade management system with the TreasuryXpress technology. It was critical that we felt comfortable with the integration and how data would flow securely between the systems.
Even after just one initial meeting, we started to feel very confident in the potential of TreasuryXpress to solve our challenges. We also took comfort from the fact that TreasuryXpress already had a large customer base of multinational corporates – which is continually growing. As such, we soon signed up for the solution and implementation began shortly after.
Believe it or not, building the integration between TreasuryXpress and our trade management system took just two days. It then took around two weeks to have all MT940 statements running smoothly through the solution. The main reason for the fortnight of bedding down was actually the banks! Most of the banks that we deal with operate on the T24 Transact core banking platform from Temenos. While this is used globally, there are certain modules – such as SWIFT reporting – that have to be switched on. As this is not automatic, some of the smaller banks we worked with weren’t using this reporting functionality (or didn’t even know it existed).