Solving Treasury Pain Points Through Co-creation

Despite huge advances in technology, treasurers are still grappling with fundamental issues in their everyday workflows. Buzzwords alone are not enough to solve challenges such as painful account opening processes or the growing risk of payments fraud. This is why BNP Paribas is co-creating with its corporate clients to leverage the latest treasury technologies to deliver concrete solutions that solve today’s treasury headaches, while preparing treasurers for the future operating environment.

Auguste Rodin, the French sculptor famous for works such as ‘The Kiss’ might not have obvious links to the world of treasury. But BNP Paribas’ latest European Treasury Board session, bringing together almost 50 treasurers from across the continent, kicked off with a tour of the Rodin museum in Paris – and in fact there were many lessons to be learned about co-creation.

Some of Rodin’s best work was done in collaboration with one of his assistants, who later became his mistress, Camille Claudel. She sculpted the hands and feet of figures for some of Rodin’s monumental works, notably ‘The Gates of Hell’. Claudel was also inspired by Rodin to create her own sculptures, and the two fed off each other in a creative partnership.

As Pierre Fersztand, Global Head of Cash Management, Trade and Payments, BNP Paribas pointed out, this partnership approach is, “Precisely the aim of the BNP Paribas Treasury Board, bringing sharp minds from the corporate and banking spheres together to come up with innovative yet practical solutions.” Working together ensures that any solutions directly address real treasury pain points, since corporates are directly involved in creation and testing of innovations – with the bank appointing corporate ambassadors to each co-creation project. This approach ensures that solutions remain relevant and practical, and are actually what corporates want and need, not just innovation for innovation’s sake.

Welcome to the future

The day of co-creation, which was moderated by Jan Dirk van Beusekom, Head of Strategic Engagement, Cash Management and Trade Solutions, saw the evolution of four projects from previous Treasury Board sessions. First up was a new solution named ‘Welcome’ which aims to vastly reduce the time required to open a bank account, thanks to digital workflows and the use of Application Programming Interfaces (APIs) to pre-populate Know Your Customer (KYC) information.

Despite momentum in the wider market towards standardised KYC processes, notably SWIFT’s KYC Registry, and the longer-term lobbying role that BNP Paribas is playing, the bank is keen to make progress right now – hence the Welcome project. Michel Verholen, Assistant Treasurer, Global Treasury Centre, Zoetis, one of the corporate ambassadors for the tool explained some of the developments around Welcome, and the benefits. “The concept of Welcome is to be able to open a new bank account in just a few clicks,” he said. “We wanted a solution that would stop the duplication of workflows around KYC – every time you open a new account with any bank, you are asked the same questions, when the bank already has that information. This makes the account opening process quite painful and drawn out, especially where there are additional local compliance checks on top of central ones.”

The challenge, explained Verholen, is that the information required to open a new account is often fragmented and unclear. “As such we were looking for a central portal where all of the information the bank holds is already displayed and any missing pieces are flagged up. This is exactly what we are working towards with Welcome.” The solution, as Mikaël Masson, Welcome Project Leader, BNP Paribas, noted, is accessed via BNP Paribas’ CENTRIC platform and uses APIs to pull together KYC information from both internal bank sources and external sources – soon to include SWIFT’s KYC Registry. This information falls into four buckets: company information; organisational structure; tax information; and bank account details.

One of the biggest improvements Verholen has seen so far during testing of Welcome is the use of digital signatures, via DocuSign, and the fact that all digital documents can be signed off in just one click. This means that, where regulations permit, there is no need to send original documents and a large proportion of the to-and-fro with the bank can be dispensed with, vastly speeding up the account opening process. The fact that a large proportion of KYC information is pre-filled on the digital bank account application form also delivers time efficiencies. “Another big benefit is that a bank account number is reserved and supplied the moment the application is submitted. This means that treasury and IT can work to activate it in SAP while the bank completes the final compliance checks, which again saves time” said Verholen.

The project continues to evolve and Verholen is keen to have access to a central KYC repository at all times, not just for opening a new account. He would also like to see more functionality in the tool in terms of integrating new bank accounts into cash pooling structures, for example. Understandably, Verholen also sees standardisation as key – given the multi-bank environment that many corporates operate in.

Masson agreed, stating: “The dream is to have a fully standardised, paperless bank account application process which interfaces with industry utilities such as SWIFT’s KYC Registry and integrates into a client-centric digital lifecycle solution. All information on the new bank account application form should be able to be signed off in just one minute. The bank will then take a few days to open the account and confirm back. It’s as simple as that.”

Welcome is already live in France, the UK, Italy, Luxembourg, Spain, and the Netherlands and will soon be rolled out to Germany, Ireland and Belgium. More than 2,000 digital onboardings have already been processed using the tool and many more are expected in the future. And Fersztand hopes the tool will also be used to better manage recertification of existing KYC information going forward.

Track and trace

The next co-creation session tackled the thorny issue of tracking payments – but interestingly, with a focus on beneficiaries and making them aware of the status of specific payments that are due to them. The solution being worked on is called ‘Benetracker’, and complements SWIFT’s global payments innovation (gpi) initiative. As a reminder, gpi is revolutionising the way treasurers track cross-border payments thanks to the use of a unique end-to-end transaction reference (UETR). BNP Paribas is one of the banks leading the charge in delivering gpi Tracker functionality direct to clients and has enabled gpi functionality on MT as well as XML messages.

Henri Fromont, Group Treasurer, L’Oreal, one of the ambassadors for Benetracker, took to the stage to explain more about the co-creation. “While a significant proportion of payments to suppliers are processed without any hiccups, we still spend a lot of time chasing a handful of lost or delayed payments made to suppliers on behalf of our subsidiaries via the group payments factory. We asked BNP Paribas to come up with a DHL-style tracker that is directly accessible by the beneficiary in order to minimise the time spent chasing these outgoing payments.”

Wim Grosemans, Head of Product Management, International Payments, BNP Paribas Cash Management, then explained how the solution works – and where it fits in relation to SWIFT gpi. “Benetracker allows the beneficiary to access a public space where they can see non-confidential data about the payment. There are no log-in credentials as such provided to the beneficiary, they simply use the UETR attached to the payment to access a public website where they can see the status of the payment.”

Also worth noting here is that inbound SWIFT gpi for Corporates payments tracking will be piloted in 2020. Audience members were extremely interested in the potential here to improve cash flow forecasting and the use of working capital. In addition, a solution called gCase is also being rolled out to streamline the payments’ investigations process on the interbank side. BNP Paribas will look to integrate this into its INQUIRO tool – a proprietary web app that digitises the compliance enquiries’ process relating to corporate payments.

 
Tackling payments fraud

Sticking in the payments area, talk then turned to the next innovation, called Payment Watch, aimed at mitigating fraudulent payments. One corporate involved in the project painted a clear picture as to why banks and corporates need to work together to tackle fraud. “According to recent statistics, 72% of corporates have been victims of a cyber-attack. Treasurers are facing growing fraud threats from CEO and CFO impersonations to malware and changes in supplier data, such as IBANs. Anything that we can do to prevent fraud, however small, is worthwhile in my view.”

While this corporate has strict processes in place to help prevent fraud, such as calling suppliers to double-check changes of bank account details, sometimes oversights happen. “We were therefore looking for help from the bank to reduce the risk. And we wanted something that would make a difference right now – we didn’t want to wait three years for an all-singing, all-dancing solution. So, we worked with BNP Paribas to look at our payments and to flag up any changes in supplier details and double-check for the risk of fraud.”

The idea was to analyse the bank data and to check whether the beneficiary name and IBAN had been used in the past. “To reduce the number of incidents that would require investigation, if details had been used in previous payment batches, we assumed they were ‘safe’ data.” “If, however, one of those two parameters was new, we wanted to be able to check whether the changes were genuine or fraudulent – and that is the basis of Payment Watch. The solution is not yet entirely mature, and several fintechs are working on similar ideas. “But any small steps that the treasurer can take, with minimal intrusion, to help mitigate fraud are certainly positive,”

Steven Lenaerts, Head of Product Management, Global channels, BNP Paribas, commented: “Payment Watch essentially takes business rules and controls around payments from the corporate side and translates them onto the bank side – as an additional layer of security. Yes, it is a relatively simple solution but it is also highly effective and available today, enabling treasurers to proactively combat fraud.”

Mining treasury data

The final co-creation update centred around CashBoard™, which is BNP Paribas’ new data analytics dashboard for treasurers. Philippe Crolus, Senior Cash Manager, Global Process Owner, Treasury & Cash Management, Novartis, was the ambassador for this project and explained the need to get more out of treasury data. “Now that the treasurer is becoming more strategic, it is important to dig deeper into patterns in cash flows and business models that could assist the growth of the company going forward. Increasingly, treasurers are also asked probing questions by management and we need to have detailed information available at the click of a button – which is where CashBoard™ comes in.”

Crolus added: “We were looking for a dashboard that would give us an at-a-glance view of our cash flows, as well as our activities with the bank – including products, accounts and fees. We were also keen to be able to benchmark ourselves against our peers and to see where we could improve our metrics.”

Patrick Vandeputte, Manager, Performance & Intelligence, BNP Paribas then presented a demo of CashBoard™, showing how the tool pulls all relevant treasury information into one place, delivering visibility and an audit trail of liquidity management activities across the group. Despite still being in development, the tool already addresses many of the needs outlined by Crolus, including the ability to deliver a quick snapshot of financial positions to management without having to produce a PowerPoint. Data can be represented in visuals or line by line.

To give an example of how CashBoard™ can help deliver treasury efficiencies, Vandeputte explained how the tool displays all bank accounts – including dormant ones. “By quickly identifying unused accounts, the corporate can determine whether there is still a need to keep them open and potentially make cost savings by shutting them down,” he said. Additionally, treasurers can analyse the payment methods being used by the group and see the proportion of transactions that involve an FX conversion, and the resultant inefficiencies. Elsewhere, the tool also displays all of the fees taken by the bank, providing another avenue for discussion and cost saving.

In his concluding remarks, Crolus noted: “Treasurers often do not have time to perform analytics and not everyone has a TMS or one that is able to provide visibility that is both broad and deep – so CashBoard™ is a useful innovation. I’m excited to see how the solution develops and delighted to be part of this project as I see it delivering benefits for the wider treasury community, not just Novartis.”

Turning ideas into reality

Concluding the day, Fersztand noted that BNP Paribas would certainly look into the new co-creation ideas coming out of the workshops held in the afternoon. But he also highlighted the need for concrete innovations that make a difference to treasurers’ lives today, so reiterated that the focus over the coming months would be on Welcome, Benetracker, Payment Watch and CashBoard™.

One of the corporate attendees, Karen Van den Driessche, Assistant Treasurer, Avnet, agreed, stating that; “Some great solutions are being developed through these co-creation sessions, especially Welcome and CashBoard™. While I recognise it is important to identify new areas for co-creation, let’s focus on delivering ongoing initiatives to all clients first.”

Meanwhile, Luc Vlaminck, Group Treasurer & Managing Director, Financière Rémy Cointreau, commented: “BNP Paribas has the right approach in involving customers at the early stage of the thinking/development process around new solutions that target real treasury concerns. This event has been a good forum to voice corporate concerns and share these with our peers and bank partners.”

Demonstrating the extent to which the session encouraged big-picture thinking, Vlaminck finished by saying: “I look forward to seeing how these solutions develop and I wonder whether, in future, the co-creation process could be replicated with other banks in order to elaborate on multi-bank solutions.”