Turbocharging Treasury: Aspen’s Accelerated Efficiency Journey

Building a European treasury hub from scratch is no mean feat – especially when you are aiming to take efficiency gains to a whole new level. Here, Christian Fraisl, Head of Accounting, VAT & Treasury and Regional Compliance & Ethics Officer, Aspen Healthcare, and Bhairav Mehta, Head of Cash Management, BNP Paribas, South Africa, explain how Aspen has successfully streamlined its bank account management and sped up its payments processes. They also outline how the company is shifting towards a centralised treasury model and embracing innovative technology to reach new heights.

Despite its humble beginnings in Durban, South Africa, Aspen has grown into a global pharma giant, improving the lives of patients in more than 150 countries worldwide. Part of this success has come from the company’s decision to establish Aspen Healthcare, a Dubai-based subsidiary responsible for the commercialisation of Aspen products in the European, Middle East and North Africa (EMENA) markets.

As Fraisl explains: “From a treasury perspective, we set up a shared service centre (SSC) in Dubai to support the company’s expansion into Europe, while taking charge of the regional bank account structure and acting as a support system for payments and collections across the EMENA region.” To make the SSC as efficient as possible, Aspen immediately embarked on a journey to streamline its bank account management and improve its global payments workflows.

“We decided to consolidate down to a single banking relationship per region, through an in-depth request for proposal process,” explains Fraisl. “Having multiple banking partners was creating a number of inefficiencies, given the need to use several online banking channels and the wide range of complex file formats involved. The compliance challenges and the ongoing burden of bank account management across multiple partners were also reasons to rethink our approach.”

In Europe, however, it was not a case of consolidating bank relationships, but building them from the ground up. Fraisl continues: “We had not previously traded in Europe, so we had no bank accounts whatsoever in the region, and no established bank relationship. Although we were running the European expansion out of Dubai, we knew that more subsidiaries would open across Europe in due course. So, from the get-go, we were looking for a banking partner that would be able to provide services right across the region and match our growth ambitions.

“The relationship also needed to support our efficiency drive, by helping us improve our daily treasury processes. We therefore wanted a European banking partner who would support our goal to have a single platform providing a full overview of our cash position. We were also looking for a bank capable of assisting us as we rolled out SAP and a new FX trading tool, 360T, helping us to optimise up to 95% of our treasury transactions, improve processes, create efficiencies and operate more swiftly.” 

The perfect match

Although Aspen had not previously worked with BNP Paribas, since the company had neither bank relationships nor bank accounts in Europe, the bank’s reputation for excellent customer service was a significant factor in Aspen’s decision-making. “Word of mouth made it very clear that BNP Paribas would be a true partner to us, providing a highly tailored service and dedicated, experienced teams across the region to help us achieve our growth ambitions,” says Fraisl.

The bank’s footprint across Europe was another driver behind the decision to award the European mandate to BNP Paribas. As Mehta observes: “There was – and is – a perfect match between Aspen’s growth ambitions and BNP Paribas’s on-the-ground presence throughout Europe.” Fraisl goes on to explain that: “Often, local offices have different requirements, especially when it comes to payments. In Italy, for example, we require specific access to local clearing schemes – and BNP Paribas is able to provide that.”

Technical capabilities were also a significant factor in the decision to appoint BNP Paribas, given Aspen’s desire to streamline bank connectivity. Mehta notes: “Aspen wanted a single-file format and a seamless, integrated connection with a single banking partner. We were able to establish a host-to-host connection in record time, offering the desired levels of standardisation and security. We also rolled out our Connexis Cash platform, to provide Aspen with complete visibility and control over bank accounts and a full range of domestic and international cash services.”

In addition, BNP Paribas was the first of Aspen’s global banking partners to be on-boarded to 360T, providing Aspen with transparency of pricing on daily FX spot transactions. “Being quick out of the blocks was very important to us, since we recognised that using 360T would help Aspen to achieve their goals and meet their efficiency KPIs,” confirms Mehta.

Moving up a gear

Once the fundamentals were firmly in place, it was time to start taking things to the next level. Fraisl continued: “With the host-to-host channel up and running, we started to work on improving reconciliations. The company undertakes tens of thousands of transactions, so having automated matching was a must – and we’ve worked closely with BNP Paribas to achieve that.”

To help streamline payment processes, BNP Paribas also implemented its INQUIRO web-based enquiry app for Aspen to reduce the number of payment enquiries and the time taken to resolve any payment delays resulting from compliance issues. As Mehta outlines: “Due to changing regulations, banks and their clients are experiencing an increasing number of compliance alerts for suspended payments, and the consequence is that it takes extra valuable time to resolve any issues using manual processes. This equates to increased operational cost and a reduction in efficiency. By using INQUIRO, Aspen’s treasury team has been able to significantly reduce the processing time of suspended transactions, improve the quality of information exchanged and benefit from a flexible digital experience.” Another benefit of this solution, says Mehta, is that it is so easy to implement: “It takes just one day from the decision to use INQUIRO to the completion of the on-boarding process.” 

Accelerating progress

Despite the huge advances already made, Fraisl admits Aspen’s treasury evolution is far from complete. The next step in this ongoing journey is to move towards a more centralised treasury model. As such, Aspen is currently working with BNP Paribas on a cash concentration arrangement for Europe.

“By the end of Q1 2019, we expect to have a physical cash pool in Ireland, incorporating all of our EUR denominated BNP Paribas accounts across Europe,” says Fraisl. “This will enable cash held by these entities to be swept to a central point and be used in a more efficient manner.”

In addition, Aspen is looking to make use of the innovative FX features of BNP Paribas’s banking platform to bring greater efficiencies to one-off transactions. “We have a handful of invoices that need to be paid in currencies that we do not have bank accounts for. Rather than paying the exchange fees after sending the funds, BNP Paribas is proposing a solution whereby we directly exchange currencies on the market before we transfer the funds, securing a far better rate. We’re excited to be exploring the possibilities here,” Fraisl enthuses.

“It’s a pleasure to work with a bank that is not only keen to innovate, but also recognises the need for great service and fair pricing,” he adds. Throughout our daily interactions, the bank continues to demonstrate its commitment to our relationship, making a concerted effort to provide us with the best possible services – right across the European region. He concludes: “This has already made a meaningful impact on our treasury efficiency and we know there is further to go on this joint journey.”