Implement Efficient Treasury System

Background and Client Challenge:

A large multinational investment banking firm approached C&A Consulting to assist them in designing and implementing a more effective way to manage their treasury activity. The investment bank employs a multi-product, multi-business strategy and has over 100 bank accounts and depository/clearing houses which it settles with on a daily basis. Each of the 100 plus bank account’s daily credit and debit activity was manually reviewed and posted to spread sheets and each bank needed a separate security log-in and FOB to enter their sites. Daily settlements were an arduous task to finalize, due to the manual nature of polling the banks, operations and the front office. Further, the daily foreign exchange exposure was manually prepared, causing delays in reducing F/X exposures. The investment bank was also manually preparing and approving its daily wires, which caused an uneven distribution of work in the cash management department which caused delays in transferring funds.

Overall the Treasury department’s inefficient process and lack of an appropriate platform increased the risk of settlement failures, foreign currency exposures not being effectively monitored and hampered the treasury departments ability to easily scale with volume spikes. In addition, by having the Firms’s bank accounts accessible on line only through a series of FOBs (FOBs and security codes were held by one person), a business continuity event could cause a delay in retrieving and processing vital bank information.

Solution:

C&A reviewed the client’s treasury process based on its unique product mix and organizational structure and applied best practices when reviewing processes and procedures. Note that C&A will temper best practices with the practicality of executing those standards under the client’s environment. C&A also is conversant in the latest technology and platforms.

C&A identified the client’s procedural gaps; evaluated the existing costs and risks associated with those gaps and assisted in selecting the appropriate treasury platform for the client. C&A teamed with the client to prepare a presentation for senior management recommending process and technological changes to improve the efficiency and internal controls of the cash management and treasury functions. C&A was also involved in the implementation phase of changing the processes and installing the treasury platform. Even though C&A took a leadership role in this project, we are sensitive to the fact that the client owns the project and needs to be engaged in every aspect to be successful in pre and post implementation.

Results:

C&A teamed with management to change processes and implement a best of breed treasury platform that would be scalable for volume increases. The improvement of the client’s operational capabilities, risk controls and real time information provided the client with the following advantages:

  • Consolidation of all banks and bank accounts within one portal and security interface
  • Preapproved wire templates, automated workflow and alerts to efficiently approve each wire
  • Continual polling of all bank and depository activity which allowed the treasury department to know its intraday cash position
  • Automated polling from the business which identified late day, same day cash settlement instruments
  • Real time foreign currency report.
  • Real time trading system for the Treasury departments money market and other investments.