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
  • Pre-approved 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