THE SOUTH AFRICAN TREASURER: NEXT GENERATION TREASURY

TMI | THE SOUTHAFRICANTREASURER 7 NEXT GENERATIONTREASURY Economic complexity, corporate growthand newbanking relationshipsmean that treasury technology andpayment infrastructures need to be agile. Logging on to amultitude of banking portals to gain a viewof an organisation’s cash position, or how to centralise payments in order to optimise working capital, are just some of the headaches that a treasurer can dowithout. A technology platform that manages bank formats and connectivity is themost important tool for a treasurer to effectivelymanage a company’s liquidity, to optimise cash and control risk. In South Africa, treasurers typically use either one or more of the following methods to access their cash balances or for processing of payments: l Manual access via the bank’s online platform l Direct Host-to-Host connection through an SFTP (Secure File Transfer Protocol) connection.This requires a direct connection to each bank within the corporate’s banking landscape. These connections aremostly used to connect a corporate’s ERP (enterprise resource planning) and TMS (treasury management system) to the banks for the automated retrieval of bank account statements and the processing of payments and debit order collections. l SWIFT connectivity allows for a single point of entry to the SWIFT network which automatically connects corporates tomore than 10,000 banks across the globe.The SWIFT network provides a corporate with additional functionality currently available over a Host-toHost connectionwhich includes real-time instructionmatching for treasury and forex transactions, banking market infrastructure for processing payment instructions between banks, and securitiesmarket infrastructure for processing clearing and settlement instructions for payments, securities, forex, and derivatives transactions. While each of these options has its place, we will explore some of the disadvantages of these platforms in the next section. Online banking platformaccess Treasurers and financial departments generally make use of online banking at the various banks to conduct banking. However, there are some challenges that this process poses: l the headache of managing user access for each user at each bank. It is a time-consuming and often documentintensive process tomanage user access and login tokens. l each bank has its own look and feel and functionality on its platform, and there are various formats for file integration that differ per bank. l organisations making use of multiple banks are therefore unable to retrieve reports at company level and usually have to resort to excel to get a complete view of their cash position. l resource intensive due to duplication of effort on various platforms and systems Direct Host-to-Host connection l connection is required per banking partner l some banks do not support this functionality l lengthy and labour-intensive process in setting up the connectivity with each bank, especially within the Afra-Asia region where many South African corporates operate andmanage bank accounts l each bank can have its own specific technical requirements and format, and as a result, many points-of-contact need to be managed l file formats and technical requirements can differ frombank to bank, as well as country to country l resources are required tomonitor andmanage the servers, the various connections and file exchange processes SWIFT Connection l high cost of subscription to the service, and thus only viable for very large corporates l high cost per message or transaction l lengthy joining and implementation procedure MORNE KLYNSMITH Head of Treasury Technology, TreasuryONE Morne is a leading expert in treasury technologywith in-depth knowledge of best-practice treasury set-up and treasury outsourcingmodels, as well as integration with banks, ERP systems and other financial institutions. He has been involved in treasurymanagement systemprojects for the past 11 years and has completed more than 80 treasury implementations across Southern Africa, Europe and the Middle East. As Head of Treasury Technology at TreasuryONE, he designs and delivers systemdemonstrations, performs needs analysis and solution design exercises, scopes andmanages implementation projects, and is responsible for client relationshipmanagement. He regularly attends international treasury conferences to ensure that he stays up to date with technology enhancements in the treasury space.

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