09 July 2018

A.T. Kearney: Pro-active Payment Tuning Delivers Major Efficiencies

Global management consulting firm A.T. Kearney's UAE finance function was looking for a banking partner with a serious commitment to the MENA region. One of the major drivers for this search was the difficulty the company was experiencing with outbound international payments being delayed by the screening process. HSBC Team explains how pre-emptive tuning of A.T. Kearney's payee database radically transformed this situation for the better.

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A.T. Kearney and HSBC have a long standing relationship in the USA, but had not previously worked together in MENA. In July 2016 HSBC made its first presentation to the A.T. Kearney MENA finance team. As various other international banks had reduced their presence in MENA, the company was particularly keen to choose a banking partner that had a proven commitment to maintaining a substantive presence in the region.

Payment issues

In the course of the discussions, it emerged that the company was experiencing significant difficulties with delayed payments. As part of their regulatory obligations, banks must screen all payments they handle to ensure that they are in compliance with all applicable regulations. Inevitably, Triggers resulting from this process result in banks holding the payment whilst seeking more information from the remitter, which often leads to delays.

As a result, a common scenario for A.T. Kearney faced was delayed payments and sometimes resolution of such delays could take couple of weeks. Often the first status indication for the payment would come from the payee enquiring about the payment, as they had not received it. In some instances salary payments to staff were repeatedly delayed impacting them adversely and exposing the bank to potential reputational damage.

Performance and commitment

This uncertainty over payment status was extremely inefficient for A.T. Kearney's MENA treasury, which was then having to waste an excessive amount of time and resources chasing up held payments. As a result, the treasury team was particularly keen on discovering how HSBC could assist in improving both the payment and information flow.

HSBC committed to a proactive approach, which involved notifying the treasury team within a maximum of 48 hours of any delayed payments caught by payment screening, the reasons for them being flagged, and information needed for the payment to be released. Subject to the required information being available, the issue would be resolved and the payment completed within a further 48 hours maximum.

Payment tuning

Additionally, HSBC took a proactive step to review A. T. Kearney’s beneficiary database including additional information relating to these beneficiaries in order to tune the bank’s screening controls which ensured that future payments to such beneficiaries would not be impacted whilst ensuring compliance with relevant regulatory requirements. This exercise ensured that future live payments to that payee would flow unhindered.

At HSBC, we understand how critical it is for our clients to pay their employees and vendors in an uninterrupted and timely manner. The pre-tuning initiative aims at proactively reducing false payments alerts whilst adhering to regulatory obligations. This not only helps our clients improve efficiencies in the payments processes, it also saves considerable amount of time and costs expended in attending to requests for additional information

Noor Adhami, Regional Head of Global Liquidity and Cash Management, MENAT.

Collaboration

This proactive review of A. T. Kearney’s beneficiary database involved close collaboration among multiple parties including A.T. Kearney’s finance team and HSBC payment teams across both UAE and UK. As the project progressed, there was a managed transition from the HSBC Sales Manager, to Client Implementation and finally to Client Services.

Now that the A.T. Kearney implementation has been completed, the Client Service team looks after the firm's day-to-day transaction banking activities. This includes assisting any new beneficiaries are reviewed proactively to ensure payments are process efficiently.

Looking to the future

HSBC is also conducting further payment-tuning based on live transaction data, including new payees that have been added to the database since the initial tuning run. The success of the original HSBC tuning initiative, coupled with the standards of day-to-day Client Service, have been well received at A.T. Kearney. As a result, HSBC is continuing to open new accounts for the firm - Oman and UAE are already live, while Saudi Arabia and Qatar are in progress.

At present, A.T. Kearney's UAE finance team are downloading payment files from their Oracle ERP system and then uploading them to HSBCnet for processing. However, this is expected change in near future, as the company's head office in the US is migrating to a real time connection using XML messaging with HSBC Connect in order to enhance automation.

Conclusion

The A. T. Kearney finance team’s willingness to try a new solution and collaborate closely and proactively with the HSBC team, plus HSBC's innovative approach, has delivered a highly positive outcome for the client. The review of payment beneficiary data has enabled A.T. Kearney to make payments in a timely manner, thereby improving vendor relations and employee satisfaction. At the same time, both the human resources and finance teams have benefited by saving time and resources that can now instead be focused on their core responsibilities.

It is always our endeavour to make timely payments to our suppliers and regional employees and we depend on our banking partners to ensure this. The proactive approach by HSBC in fine-tuning our payments data has ensured the payments are sent in a seamless and timely manner. In addition to this, having a dedicated contact at HSBC responsible for channelling any additional information requests for payments ensures we avoid unnecessary delays in paying our suppliers. Our counterparties are an integral part of the value chain and the steps taken by us and HSBC in fine-tuning the payments have further strengthened our relationship with our suppliers.

Paul Smith – Regional Finance Director, Middle East and Africa, A.T. Kearney.

About the client - A. T. Kearney

A.T. Kearney is a major global management consulting firm with more than 3,600 personnel that operates in more than 40 countries. The firm numbers more than 75% of the Fortune Global 500 amongst its clients, in addition to leading non-profit and governmental organisations.

A.T. Kearney assists clients with implementing high-impact strategic transformations. In doing so, it exploits exponential technology change and an ability to get to the core of multiple issues and opportunities, both quickly and efficiently.

By combining strong capabilities in strategy, digital, analytics, strategic operations, and change management, the firm enables clients to gain exceptional value in numerous areas. Among others, these include operational and digital transformation, procurement and supply chain optimisation, M&A, top-line transformation and swift earnings expansion.

Payment Beneficiary review is undertaken at the sole discretion of HSBC and for selective clients and in line with HSBC’s internal policies and procedures.

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