Streamlining Bank Account Data for Enhanced Cash Visibility

Wanting to get a better handle on its daily cash positions, Ravenscroft Group has implemented a solution with TreasuryXpress to enable the efficient collection of SWIFT MT940 reports, feeding them straight into Ravenscroft’s in-house trade management system. The TreasuryXpress implementation has also removed 90% of paper-based bank account reconciliation processes, freeing up significant time and resources for more value-added tasks.

Ravenscroft Group (Ravenscroft) is an independently-owned investment services group with offices in Guernsey, Jersey and the UK. Today we employ more than 100 people and have £6.5bn of assets under administration for both private and institutional clients.

As a financial firm, Ravenscroft must adhere to the client money rules described in the UK Financial Conduct Authority’s (FCA’s) Client Assets Sourcebook (CASS) – for client monies in the UK. We also extend those same rules to our operations in Jersey and Guernsey, since this is the direction of travel of regulation, and safety of client monies is paramount.

Our aim as a company is to build the leading Channel Islands-based investment services firm through exceptional customer service, integrity and accountability. To begin our journey towards this goal, we knew we first needed to go back to basics and review our processes – especially around financial flows.

Starting from scratch

When I joined the company three years ago, there was no distinct treasury function and, as such, there was a lack of visibility over bank account balances. We also learned that client monies traditionally sat on the balance sheet of the custodian. With so much pooled money being left with one institution, we knew we wanted to improve counterparty diversification.

The decision was therefore taken to establish a formal treasury function at Ravenscroft and we set up a network of banking partners, which were primarily located offshore. We also built our own trade management system in-house, which could be customised to suit our needs and provide a competitive edge.

Once we started to trade using the system, however, we quickly realised that the bank account reconciliation process was becoming burdensome, as our banking partners used a variety of different formats to send us account information. We urgently needed to find a way to resolve this, and the obvious answer was to use the SWIFT MT940 message format.

With a preferred message type settled on, we wanted the ability to self-clear investments but initially found ourselves doing everything manually. This was through a combination of spreadsheets, services from financial business solution firm Pershing, and the in-house system. The scale of the manual effort here cannot be underestimated – we were manually uploading and aggregating almost 200 bank statements daily, including interest flows, which took over three hours per day to accomplish.

Integrating external treasury technology 

The challenge we faced was to work out how to collect all the SWIFT MT940 data in an efficient way. Once we identified our goals and began our research, we discovered TreasuryXpress on LinkedIn and connected with their team to discuss our needs.

Through an initial conference call with the team at TreasuryXpress, the software developers and our front office and back office, we were able to explain what our issue was and what we were looking for. We also had our in-house cybersecurity expert in this initial meeting, who was able to ask a number of questions on the security aspects of the project – this was vital given the nature of the business that we work in and the fact that we were looking to integrate our in-house trade management system with the TreasuryXpress technology. It was critical that we felt comfortable with the integration and how data would flow securely between the systems.

Even after just one initial meeting, we started to feel very confident in the potential of TreasuryXpress to solve our challenges. We also took comfort from the fact that TreasuryXpress already had a large customer base of multinational corporates – which is continually growing. As such, we soon signed up for the solution and implementation began shortly after.

Believe it or not, building the integration between TreasuryXpress and our trade management system took just two days. It then took around two weeks to have all MT940 statements running smoothly through the solution. The main reason for the fortnight of bedding down was actually the banks! Most of the banks that we deal with operate on the T24 Transact core banking platform from Temenos. While this is used globally, there are certain modules – such as SWIFT reporting – that have to be switched on. As this is not automatic, some of the smaller banks we worked with weren’t using this reporting functionality (or didn’t even know it existed).

Nevertheless, TreasuryXpress was soon up and running and working well. The process was sped up as we gave the TreasuryXpress team the authority to speak on our behalf to our various banking partners. As such, TreasuryXpress did a lot of the legwork in getting the banks to send test messages etc. Having significant implementation experience, the TreasuryXpress team also knew exactly what the requirements were and how to fulfil them, which was a huge plus for us.

Full speed ahead

Now that everything is running smoothly, we use TreasuryXpress as a central hub. All the banks send their MT940s, or on occasion a different message format if they cannot use SWIFT, to TreasuryXpress which then reconfigures this in a way that lets all the information come back down the pipe to us to automatically populate our own trade management system.

At the beginning of each day, we now know that the balances in our trade management system replicate what is out there in the real world. This ticks boxes for the internal audit, our external auditors and also our regulators. Although the regulatory requirement in the Channel Islands only requires bank account reconciliation to be carried out on a weekly basis, the TreasuryXpress solution has enabled us to be one step ahead of the regulators – which is a significant benefit.

In addition, the integration with TreasuryXpress has also reduced settlements’ processes – all we have now is an occasional exceptions report. Since implementing the TreasuryXpress solution, we have effectively eradicated 90% of paper, therefore.
And with the new automated, digital set up, treasury can focus on its core responsibility of liquidity management and look to add strategic value to the organisation, instead of being bogged down in repetitive manual tasks.

Continuing the journey

Following the implementation with TreasuryXpress, we are very happy with how the system is working. If ever we have a question, the TreasuryXpress team respond via email within 30 minutes, or pick up the phone and talk it through with us. This flexibility and responsiveness has been invaluable.

Building on the success of this initial implementation, we are keen to explore how else we can leverage TreasuryXpress. We currently use our own in-house treasury system as a dashboard that provides visibility on our cash positions. Although this dashboard serves our needs at present, if we continue to grow at a rapid rate, we will require more functionality in this area. The TreasuryXpress dashboard looks to be very impressive, enabling visibility of cash in an instant, and this is something I am excited to explore when the time is right.