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.

[[[PAGE]]]
Implementing SWIFT
Raymond James was one of the first non-bank financial institutions to join SWIFT as the eligibility criteria were extended. Bottomline and SWIFT worked with us to evaluate our business processes and message types when we first went live, and conducted a review again recently. As a result, a variety of modifications were defined, although only one of these related to message types over SWIFT. SWIFT encouraged us to work through banking partners rather than becoming involved directly. At first this was not always easy for our banks, who had different requirements to us. For example, while we wanted independence and flexibility in our choice of banking partners (which has ultimately proved beneficial), they wanted ‘stickiness’ to ensure ongoing use of their products and services. When we first approached them, most banks were not ‘SWIFT-savvy’ and relationship managers often did not know whether the bank supported SWIFT. Therefore, we often had to spend a lot of time finding the right people to speak to at the bank. Even now, we often find that a relationship manager does not know who we should talk to, although the level of familiarity with SWIFT has improved.
We found it difficult to format payments at first, particularly as we could not always rely on the necessary support from the banks; this has become easier over the past 18 months and particularly in the last six months as banks’ support of SWIFT and the necessary expertise has developed. In some cases, we have found it necessary to change banks in order to achieve the overall connectivity objectives that we set out. However, even if ‘bank agnosticism’ may not be attractive to some banks, they are increasingly coming to recognise the value of ‘format agnosticism’ i.e. that the use of proprietary formats is not a reason for customers to remain loyal; rather, support of standard formats makes it easier for customers to work with them. Even so, standardisation remains difficult to achieve, so we are now considering ISO 20022 formats.
Other project implications
We have achieved substantial processing efficiency in our use of SWIFT with WebSeries, although inevitably some issues are outside our control. For example, while we would like to minimise our use of cheques and replace them with ACH payments, this depends largely on customer preference. We can establish up to 99 ACH profiles in WebSeries which can be set up for each client, which makes ACH payments very convenient. We launched a campaign to encourage ACH payments amongst our clients, and although support was not universal, we managed to reduce the number of cheques we issue considerably, from 35,000 a month to between 5,000 and 6,000.
Future plans
In the future, we are looking to integrate our international operations onto a single SWIFT platform: at present, we have two separate departments connected to SWIFT, so we are seeking to better leverage our infrastructure. New offerings like SWIFT integrator and Bottomline’s most recent version of WebSeries, which leverages a J2EE architecture, with mapping tools for message tags will make it easier to use ‘if…then’ commands to increase our straight-through processing further. Had SWIFT Alliance Lite been available at the start, we might have considered this to enable more rapid integration, as it provides the tools we need without the need to become a full SWIFT member; however, the project to date has been extremely beneficial to Raymond James and the services we are able to deliver to our customers.
