Financial Technology

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Integration and Optimisation at Raymond James Financial Before embarking on our new systems project, Raymond James had fairly manual processes in place. Clients could request cheques, wire or ACH payments through one of our 2,200 locations. These business centres then applied for the payment through one of our two processing centres which reviewed the approvals that are required and produced the payment in the relevant format. Depending on the client, or the type of payment, there are potentially 14 approval stages, with client instructions ranging from no approvals through to around 12. Each of the processing steps, including each approval, was performed manually, which became particularly onerous when approvals needed to be conducted by people across four separate buildings. Once the necessary approvals had been obtained, payments were given to either Accounts Payable or Treasury who entered them manually into the relevant system. Payment details were then sent back to the originating business centre in order to raise a journal entry...

Integration and Optimisation at Raymond James Financial

by Elizabeth Eriksen, Assistant Vice President for Accounting Operations, Raymond James & Associates, Inc.

Raymond James Financial, Inc. (Raymond James) was founded in 1962 and has been a public company since 1983, traded on the New York Stock Exchange (RJF). Raymond James is a diversified financial services holding company with subsidiaries engaged primarily in investment and financial planning, in addition to investment banking and asset management. Through three broker/dealers, more than 5,000 financial advisors serve approximately 1.9 million accounts in approximately 2,200 locations throughout the United States, Canada and overseas. In addition, total client assets are approximately $170 billion, of which approximately $28 billion are managed by the firm’s asset management subsidiaries.

Before embarking on our new systems project, Raymond James had fairly manual processes in place. Clients could request cheques, wire or ACH payments through one of our 2,200 locations. These business centres then applied for the payment through one of our two processing centres which reviewed the approvals that are required and produced the payment in the relevant format. Depending on the client, or the type of payment, there are potentially 14 approval stages, with client instructions ranging from no approvals through to around 12. Each of the processing steps, including each approval, was performed manually, which became particularly onerous when approvals needed to be conducted by people across four separate buildings. Once the necessary approvals had been obtained, payments were given to either Accounts Payable or Treasury who entered them manually into the relevant system. Payment details were then sent back to the originating business centre in order to raise a journal entry.

Workflow challenges

There were significant challenges associated with this workflow. Every step in the process, which was effectively hand written and personally transferred to the next stage, brought the risk of error, which was highly problematic for a firm which moves billions of dollars a day. Business centres had no visibility over the progress of a transaction which made it difficult to provide the level of customer service for which we were striving. It inevitably took a lot of time to process payments, which put pressure on cut-off times, particularly as we had to produce payments in multiple formats across six to eight banks. We had no specialist software tools in place, relying on spreadsheets for cash management, which made it difficult to integrate data and apply common standards.

Outlining a payments solution

We realised that we needed a better solution, and we already worked with Bottomline Technologies, Inc. for local cheque printing. We were also already a full member of SWIFT, which we used for international trade settlement; consequently, we decided to leverage our SWIFT platform and relationship with Bottomline to optimise payments processing. We have now implemented a major new solution for payments processing and cash management based on a combination of Bottomline’s WebSeries and SWIFT, with new, consistent business processes across the firm. This will ultimately extend across both Treasury and Accounts Payable although the treasury workstation is not yet fully operational.

Solution in practice

Each financial adviser now has direct access to a central system using a web link, which automatically validates whether the user is authorised to deal with the client. The system then brings back the full client record, and the financial adviser can request the client payment. This information is then automatically updated into our back-office system for processing. The type of account is validated, such as a managed account, retirement or non-retirement account etc., in order to establish the necessary approval rules. Approval is done online, with e-mail alerts sent to approvers every 30 minutes. Approvers can review payment and client information online, together with any necessary back-up documentation such as letters of authority for third party payment instructions.

Accounts payable runs are performed every two hours, and cheques can be printed at the originating branch, or an alternative one, leading to significant flexibility for our clients. For wire transfers, treasury assigns the relevant account and WebSeries produces MT103 messages. These are passed through SWIFT, with a reference number allocated immediately, with prompt account posting. Reporting is consistent with a standard look and feel, with enquiry functionality and significantly improved audit capabilities. In the past, we had two cash managers who accessed bank statement information from our various banks, which all used different mechanisms e.g. push, pull or scheduled information downloads. The manual processing required to source statement information is now greatly reduced, enabling more time to be spent on value-added tasks.

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