Published: September 19, 2011
The Deutsche Post DHL Group offers a unique portfolio of logistics and communications services through the Deutsche Post and DHL corporate brands. The Group provides its customers with both easy to use standardised products and innovative and tailored solutions ranging from dialogue marketing to industrial supply chains. About 470,000 employees in more than 200 countries and territories form a global network focused on service, quality and sustainability. With programmes in the areas of climate protection, disaster relief and education, the Group is committed to social responsibility.
Deutsche Post DHL (’DPDHL’) has a highly centralised treasury department based in the global headquarters in Bonn, Germany. In addition, we have three regional treasury centres located in Singapore for Asia Pacific, Florida USA, for the Americas, and Bonn for EMEA. These regional treasuries maintain direct contact with business units and ensure compliance with global policies that are designed by group treasury. Treasury takes responsibility for managing the financial risk of the group, including liquidity, FX, counterparty, country and interest rate risk which we achieve by centralising exposures as much as possible and managing them on a group level.
Before implementing SWIFTNet, we already had a bank-independent electronic banking system in place, but we were conscious that the solution had a number of limitations. It was expensive to maintain, as we still needed to set up direct interfaces with each bank, and there were some challenges in terms of security and usability. As the experience of implementing SWIFTNet developed amongst the corporate community, we recognised that it was the right solution for us as it satisfied our multi-bank integration needs, security and efficiency objectives. We therefore made the decision to migrate to SWIFTNet in mid-2010 and selected Broadridge as a service bureau based on their credibility and experience with similar implementations. [[[PAGE]]]
We decided that we wanted all treasury payments to be routed through SWIFTNet and to achieve this we needed to connect to all of our major banking partners. We started that project in September 2010 and are in the meantime live with six out of ten key banking partners. UniCredit was a key part of our implementation project as we have local zero balancing cash pools in Central & Eastern Europe (Hungary, Czech Republic, Slovakia, Slovenia and Austria) with the bank. We started the project with UniCredit in February 2011. The project included receiving account statements through FileAct (MT940) and payments (MT 101) via FIN.
The implementation process with UniCredit was very positive, and we had a single point of contact through UniCredit Germany, who then co-ordinated with the bank across the five countries in the project. We receive bank statements centrally through UniCredit Germany which are then routed automatically by Broadridge to the relevant DPDHL entity. This meant that we needed to include header information on files so that Broadridge could recognise the bank branch from which files had originated. This was achieved very successfully without challenges based on the expertise and commitment to mutual objectives by UniCredit, Broadridge and the DPDHL team. Similarly, Broadridge also channels payments to UniCredit branches via UniCredit Germany as individual FIN messages.
We decided we wanted all treasury payments to be routed through SWIFTNet and to achieve this we needed to connect to all of our major banking partners.
The implementation with UniCredit was very smooth and took only ten weeks including contractual negotiations, pricing discussions, implementation, testing and go live. Having now had experiences with a range of banks in setting up SWIFTNet, the project with UniCredit has proved by far the quickest, best structured and most professional. In addition, the contract process was very efficient and straightforward compared with our experiences with other banks. In many cases, we had to go through a very long SCORE contract, much of which repeated terms already included in our contract with SWIFT. With UniCredit, however, we had only a short contract that focused on the new elements of the service, and was primarily technology-related. This made it quick to review and complete, allowing us to progress quickly with the implementation.
We have established a direct link between our treasury management system and SWIFTNet for our treasury payments; in addition, we will put in place a link between the payments platform used by our shared service centres as we expand our use of SWIFTNet in the future, both of which will be managed by Broadridge. We have structured our processes so that whatever part of DPDHL creates files for transmission through SWIFTNet, files need to be approved and encrypted in advance. Consequently, treasury is responsible for routing files to the bank, but is not involved in operational control of local payments, with the exception of payments originating from treasury. [[[PAGE]]]
As a result of implementing SWIFTNet, we have been able to restructure our internal authorisation processes in treasury. With our legacy system, we had the option to select a four-eyes or six-eyes principle, as opposed to having different approval levels depending on the type of payment. We therefore had a six-eye principle which meant that authorisation was often time-consuming. We have now been able to streamline internal approvals so that liquidity and internal flows have one creator and one approver only, while external treasury flows have one creator and two approvers. This is more efficient and less labour-intensive. In addition, SWIFTNet has already proved to be more robust, stable and efficient than our previous connectivity solution.
Looking ahead, we have a variety of initiatives that we are planning. We intend to transmit operating payments from our shared service centres through FileAct to UniCredit and our other global payment banks. We will also be extending the retrieval of electronic bank statements to include subsidiaries. Finally, we are also seeking to use SWIFTNet to exchange confirmations on FX and money market transactions.
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