Published: June 01, 2012
ITV Plc was seeking to create an efficient treasury function that would reduce complexity, meet our current treasury, cash and risk management needs today, and provide the capacity, resilience and flexibility to accommodate changes to the business in the future. One important element of this was our treasury infrastructure, to enable secure, efficient transaction processing and facilitate effective decision-making through access to timely, accurate and complete information.
We have a centralised treasury function that supports our subsidiary companies both in the UK and internationally. Consequently, we are responsible for managing multiple bank accounts in approximately ten currencies. Our treasury activities are quite complex. Historically, we conducted a great deal of manual processing and the confirmations process was time-consuming. One particular challenge was the lack of real-time visibility and access to group cash. For example, business units sent bank statements to treasury but this could be on a weekly or monthly basis.
To create greater visibility and control over our cash, we decided to introduce a zero-balancing cash pool, initially for our UK operations, supported by an in-house bank. In addition, we recognised that we needed to enhance automation and control over processes, for which a treasury management system (TMS) would be required. This would enable a more integrated and secure method of sending payments and producing confirmations. Processes such as accounting for treasury transactions would be automated to reduce manual processing and avoid the risk of error, and connectivity with banking partners both for sending and retrieving information would be enhanced.
Having recognised the need to enhance our treasury activities, we selected a TMS to facilitate more efficient treasury processes and increase cash visibility, and a bank account reconciliation system to automate timely reconciliation of our operating accounts. We also made the decision to connect to our banks through SWIFTNet. Using SWIFT was an important element of our treasury strategy in order to reduce our reliance on individual banks, therefore providing greater flexibility in the future, and to ensure sufficient capacity for changes to our business.[[[PAGE]]]
We evaluated three outsourced service bureau offerings before selecting the SWIFT Access Service, Bottomline Technologies’ SWIFT service bureau. There were a variety of reasons for this decision:
The company’s SWIFT expertise was evident throughout the project, from helping us with the initial SWIFT application through to testing and go-live. We selected the SWIFT Access Service in September 2010 and went live on both our cash pool and SWIFT connectivity in January 2011.
Using SWIFTNet has allowed us to receive MT940s from various banks which are consolidated by the service bureau and uploaded automatically into the TMS and reconciliation system for automatic reconciliation and cash positioning. Payments are transmitted through SWIFT FIN/FileAct
We also use combination of our TMS and SWIFTNet to automate the exchange or FX and money market deal confirmations. Whenever a deal is entered into the TMS, a MT320 or MT300 is generated and transmitted to the counterparty automatically through SWIFTNet. Counterparty confirmations are received in the same way and matched automatically in the TMS, with mismatches flagged for further investigation. We have configured our TMS so that treasury payments are only released once the confirmations have been matched.
Our objective was to achieve more integrated and streamlined treasury processes based on a combination of cost-effective, best-in-class solutions that met our current and future needs. We have achieved this objective very successfully, enabling us to automate time-consuming manual processes such as accounting and reconciliation and free up resources to focus on resolving exceptions and more value-added tasks. We have also been able to improve internal controls and develop greater visibility over our cash and risk, which in turn facilitates better decision-making.
Connecting to our banks through SWIFTNet was a key element of our strategy. In particular, we have been able to reduce our reliance on individual bank solutions by replacing them with a robust, secure, multibank channel that has the capacity to meet volume increases in the future. This also provides us with greater flexibility and independence from our banks. However, connecting to SWIFTNet can be a major project and we did not have the resources or expertise to take this on ourselves, nor is it a core part of our business. Working with SWIFT Service Access from Bottomline Technologies has been very valuable by enabling us to take rapid advantage of SWIFTNet without incurring additional technology or resourcing costs internally.[[[PAGE]]]
We are already planning to leverage our investment in SWIFT connectivity further by using tools provided as part of our ERP to identify receivables from the MT940 statements, and automatically post these to debtors’ accounts. We are also working with our overseas entities so that they will report their cash balances over SWIFTNet on a daily basis which will give us timely and complete visibility over our cash and liquidity position.
We see Bottomline as a strategic technology partner and we are already leveraging their proven payments products. We are planning to bring the same high level of automation to the management of non-treasury payments, such as the BACS run for vendor, payroll, expenses, SEPA payments, CHAPS payments, international payments and faster payments. This will enable ITV to eliminate further manual processing whilst increasing efficiency.
Based on our experiences, I would strongly recommend that other corporates seeking to achieve greater capacity, resilience, security and independence in their bank communications consider using a service bureau to connect to SWIFT. By doing so, the cost and resourcing requirements to connect to SWIFT are greatly reduced, and companies can implement quickly and cost-effectively. It is also important to choose your banking providers, technology vendors and service bureau carefully. While the functionality and ease of use of specific technology applications is important, the quality of service and expertise offered by each partner is extremely valuable to a successful project. We were fortunate in that our bank, TMS vendor and service bureau had worked together successfully in the past, so they knew each other and had a ready understanding of what needed to be done, resulting in lower project risk and a smoother implementation.
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