SEPA

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Treasury Technology Innovation at Neopost Neopost has a centralised approach to cash management through its holding company, although payments and collections are conducted locally. Balances are swept daily using zero balancing cash pools in five countries. Although the company has a small number of core bank, it has ten cash management banks to deal with local collections such as cheques. Neopost’s Group Treasurer, Christophe Liaudon, offers insight into the treasury enhancements they hoped would be provided when the company selected SWIFTNet in 2008, and how their banking partners played a key role in the success that followed.

Treasury Technology Innovation at Neopost

by Christophe Liaudon, Group Treasurer, Neopost

Neopost has a centralised approach to cash management through its holding company, although payments and collections are conducted locally. Balances are swept daily using zero balancing cash pools in five countries. Although the company has a small number of core banks, it has ten cash management banks to deal with local collections such as cheques.

Technology harmonisation and enhancement

In 2008, we made the decision to review our treasury technology and connectivity, which was not harmonised across the Group at that stage. We recognised that with the approaching migration to SEPA (Single Euro Payments Area) and the termination of ETEBAC, which was our communication protocol with our banks, we needed to find a way of harmonising, integrating and optimising our technology infrastructure. We decided that a new TMS (treasury management system) integrated with SWIFTNet would meet both our central and local cash management needs and reduce our IT overheads. There were a variety of reasons for selecting SWIFTNet:

Firstly, we would be able to connect with our various banking partners through a single channel;

Secondly, it provided the level of security that we were seeking;

Thirdly, and very importantly, as any file format can be transmitted through FileAct (file transfer mechanism through SWIFTNet), we would not need to make changes to our ERP or amend file formats initially.

From planning to realisation

We first approached Societe Generale and our other key banking partners about the feasibility of implementing SWIFTNet, to ascertain their SWIFT capabilities, and the likely costs and implementation effort. We also explored the alternatives for connecting to SWIFTNet, in particular the decision as to whether to connect directly or indirectly through a service bureau. We soon decided to connect through a service bureau, as we did not have the human or financial resources to support a direct connection.

In parallel, we issued an RFP (request for proposal) to key TMS suppliers. Based on an extensive evaluation process, we chose Kyriba. As the solution is delivered using a software as a service (SaaS) model, we did not have to involve our IT team a great deal. Furthermore, thanks to the Kyriba offer which is directly an all in one offer with a third bank service bureau, we could work with a single supplier.

In June 2009, we finalised our agreement with Kyriba and started on the implementation. At the same time, we embarked on the SCORE (Standardised Corporate Environment1) documentation process with our banks, which we completed in October 2009. We also engaged in a test phase of the project and were able to exchange live files for two entities with seven banks in France in November 2009. Since then, we have extended SWIFTNet connectivity to a further five  entities in France.

Between the first agreement signed with Kyriba, in June 2009, and the final ‘go live’ with seven banks in November 2009, only five months passed: it’s a fantastic achievement.

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