Payments

Payment Approval Workflows & Controls

Sujith Nair — Tue, 06 Sep 2011 20:17:14 GMT

Treasury Sciences EFT is a web-based multi-bank payment origination system. It allows for custom payment workflows and controls, ability to set per-transactions and cumulative limits at multiple levels, allows free-form and bank independent template based and netted payment originations and supports ISO 20022, SWIFT MT and even custom bank formats for payment transmission to banks. The key differentiator between TS EFT and other systems (bank provided and otherwise) is that most if not all payment approvals processes and controls that are needed to meet an organization's specific needs is accomplished in TS EFT via configuration.

This post looks at couple of typical payment origination processes and controls that can be configured within TS EFT. The first scenario shown below is a typical configuration of TS EFT for an organization that utilizes one payment bank and needs free-form, template based and netted originations with dual approval. Note that TS EFT provides payment controls such as the differentiation of payments users from administrative users - ensuring that a user has permissions to originate or approve the creation of a bank account does not have the ability to originate or approve payments and vice versa.

The second scenario described below discusses a more complex configuration of EFT (note that this is still configuration and not custom development or customization of the product) wherein an organization needs 2 different approval processes - a one step approval process for payments originated from pre-approved templates for the treasury organization (typically for net-funding or concentration wires) and a dual-approval process for all payments from subsidiaries. Also note the connectivity to multiple payment banks as well.

Electronic Funds Tranfer Module - Key Benefits

Sujith Nair — Fri, 22 Oct 2010 07:17:07 GMT

In a recent product demonstrations, we have been discussing our Electronic Funds Transfer Module extensively with multiple organizations. There are multiple benefits to an organization that utilizes our electronic funds transfer module - bank independence, ability to attach supporting documents, custom approval processes, no per user fees, ability to capture accounting treatment upfront, netting capability from backend A/P systems, our standardized and configurable approach to building systems to name a few.

Now, if you look at the types of organizations that are typically interested in our Electronic Funds Transfer Module there are a couple factors that stand out- key benefits offered by our payments module that make our product extremely useful to these enterprises.

The first being bank independence. If you are an organization that utilizes multiple payment banks (hedge funds as an example with multiple Prime Broker and Custodial relationships) the benefits of adopting a bank independent payments system (a payment system that can originate payments from multiple banks utilizing standards based integration) far out weigh the costs.

The second (not in the order of importance) key factor is internal control requirements and related benefits. i.e. If you are an organization that needs to enforce rule-based netting and controlled origination via payment templates offered by the product or if you are an organization that originates hundreds of payments and need a more configurable system (than what is offered by you bank) to better manage your internal users and processes such as paperless approvals and upfront capture of accounting treatment or as in the case of one of our current customers who utilize custom organization specific approvals and controls for payment approvals and account management for hundreds of users.

Thank you for reading. I would love to hear you thoughts on why you decided to adopt or not adopt a payments system from a third-party vendor and what your reasons were; you can reach me at sujith@treasurysciences.com

Bank Independent Payment (EFT) Templates

Sujith Nair — Tue, 19 Oct 2010 03:58:57 GMT

While originating payments using any EFT system, the most time consuming activity is of course to make sure that all information- especially the beneficiary information is entered correctly. Approval is also time consuming as the approver has to check supporting documents and make sure that the data entered is correct (payment controls). This process of origination and approval for each one-off payment becomes even more painful if you are using multiple bank proprietary systems to originate payments.

Treasury Sciences EFT, as you know is a bank independent payments system. We solve it by using generic, bank independent payment templates. Payment templates also go through an approval process and once approved, originators can use the templates to originate payments by entering the value date and amount. Approvers can approve payments originated out of templates faster knowing that the beneficiary details have been approved earlier (while approving the templates). That may be the reason why templates are one of the most used features within the Treasury Sciences EFT Module.

Now, here is a quick walkthrough of templates and payments via templates. See below a listing of templates that lists the beneficiary and transaction type. Templates can be created by originating a new template creation request or by asking a specific payment originated in the system to be approved as a template as well- Approvers can approve the template and once approved, the template will be available for payment originators.

When originating payments from the EFT request tab, users have the option to choose originate with templates or use free form origination. If they choose, the originate with templates option users are asked to select a template (please see below). There are filtering option and a quick search option (you can search by beneficiary as well)

Users would double click to select templates and proceed with origination. All they have to add in this case will be the amount, note that the system is setting a default value date based on the date of origination and the transaction type, it is editable of course.

Thank you for reading, Hope that explains the use of payment templates and related ease of use and control benefits that templates provide.

Treasury Sciences -SWIFT Connectivity

Sujith Nair — Mon, 11 Oct 2010 20:18:51 GMT

This post provides an overview of our support for SWIFT. You may know already that we support the MT and ISO 20022 payment formats for payments, transfers, credit notices etc and SWIFT 940/942 for current and prior day reporting. In addition to that, if you utilize the SWIFT network you could use one channel to communicate with all the banks- this is especially true if you need connectivity to multiple (say more than 8 or 10) of banking institutions.

The key benefit here is that you can utilize our cash management, payments system and integration capabilities - the ability to configure your own payment controls, approvals workflow, forecasting from internal systems and positioning and the ability to push data through (STP) to backend GL Systems along with the ability to utilize SWIFT Network for all bank and financial institution connectivity.

Do note that since we have in-built support for SWIFT payment formats, all you will need to utilize SWIFT is for the SWIFT network. If you would like to know more, please send me a note.

Cash Position, Multi bank payments, Payment workflow implementation, Treasury Management , Treasury Management System , Treasury Reporting

Payments, Positioning & Integration for Hedge Funds - Overview

Sujith Nair — Thu, 07 Oct 2010 06:07:41 GMT

The last 2 posts detailed out various aspects of our implementation for a large hedge fund. Todays post or picture provides an overview of the complete implementation - this picture is an early version of the picture that will appear in a case study of our payments and cash management system implementation for hedge funds. Will post a link to it when available. Meanwhile, here is the overview.

Automated Accounting Treatment, Cash Position, GL Integration, Hedge Fund Treasury, Hedge Fund Treasury Worstation, Multi bank payments, Netted Payments, Payment workflow implementation, Reporting, Straight Through Processing, Treasury Management , Treasury Reporting, Treasury Workstation, Treasury Workstation Reporting

Transaction Manager for Netted Payments from Portfolio Management Systems - Hedge Fund Implementation

Sujith Nair — Wed, 06 Oct 2010 04:51:09 GMT

In the last post, I described the integration features provided by TS EFT into Sungard VPM and other portfolio management systems. Today, I will discuss the transaction manager dashboard within TS EFT that enables end users net transactions and some other value added features.

Note: These screenshots are created from our implementation of TS EFT for a hedge fund customer. Even though the screenshots are from a test environment (we provide a user acceptance environment where end users at the customer can test and verify a feature before we push the feature out to production) I have hidden some data fields to ensure that I don't expose any customer data inadvertently.

The screenshot above shows the transaction manager screen and all features provided by it. On the left of the screen, you can see the options to view this dashboard, ability to import files manually from Sungard VPM or other portfolio management systems, the ability to map payment templates to certain fields to enable auto population of data and a screen that lists all submitted transactions.

On the top part of the screen, are the various filter criteria- here we have the ability to filter by account, fund, security type and multiple other filters. Also available is the ability to filter based on transactions that are mapped or not mapped to a template.

Do note that this screen including the fields listed and the filter options available are completely configurable to a customer's needs.

Below the filters we have the table that lists all the transactions imported from the portfolio management system - Sungard VPM in this case. Each column is sortable, the columns are configurable per deployment as well. On the left of the table are the check boxes that users can select to net transaction together.

As mentioned in my previous post, we have an automated scheduler that pulls data from VPM into TS EFT module. Additionally, we provide a quick end user import feature that enables end users to import file s manually into the system - the import screen is shown below.

Finally, a quick look at the mapped payment templates via the template mapping option on the left nav of the screen- here the system lists all the templates mapped and criteria based on which the templates are mapped.

Note that the payment template mapping criteria for this hedge fund customer is based on account type, security type and currency. This mapping criteria is again configurable and can be setup differently for another deployment.

End users can also add additional template mappings and remove existing template mappings using this screen.

Thank you for reading. Do let me know should you have a question or if you have similar needs.

Hedge Fund Treasury, Multi bank payments, Netted Payments, Treasury Management

Netted Payments from Sungard VPM - Credit Notices, Transfers and Wires - Hedge Fund Implementation

Sujith Nair — Tue, 05 Oct 2010 06:59:49 GMT

In a previous post, I had described some of the challenges and implementation details of a recent payments system implementation for a hedge fund customer. You can read that post here.

This post further details the integration of our payments module (TS EFT) with Sungard's Virtual Portfolio Manager (VPM), subsequent details of netting and eventual transmission of payments, credit notices and transfers to the banks. The picture below provides an overview of the integrated system, details follow.

Sungard VPM Integration: Scheduled exports from Sungard VPM are created and uploaded to folder from which the TS scheduler pulls the data into the TS EFT module. The file imported has a list of transactions and each transaction has a unique transaction identifier and a field that indicates whether the transaction is a new one, an update or a delete request from VPM. Note that transactions from VPM can only be updated or deleted ONLY if the VPM transaction is not part of a netted EFT transaction already. If not, the EFT has to be rejected and only then will the transaction be updated or deleted.

Transaction Manager & Netting Capabilities: The EFT transaction manager lists all imported transactions and allows users to select transactions to net based on rules that can be defined per combination of fields - for example, only certain transactions maybe netted together based on multiple configurable fields (say the clearing broker and currency) from the VPM import file. As the transaction manager is completely XML driven; the product can easily be configured to support other portfolio management systems such as Advent Geneva. It can even be configured to integrate with in-house portfolio solutions.

Template Mapping: TS EFT supports creation and use of templates for all payment transaction types - note that these are templates that are independent of the banks themselves. The transaction manager also allows to map templates to end user selected mapping criteria based on data in the VPM input file. Here again, you could create and map templates - one per clearing broker and currency thereby requiring the user who nets the transactions to create the EFT to enter minimal information on EFT origination.

Payment Types: For this customer deployment, their custodial accounts are at BONY and CSFB has their prime broker accounts. Cash positioning for the custodial accounts held at BONY is done via TS CMO module and hence the need for forecasting for BONY accounts. Based, on the mapped templates or banks and accounts selected on free form transactions, the system presents the appropriate forms. The payment type selection criteria and associated transaction types for payments, notices and forecasts is described in the picture below.

A note about SWIFT for transmission: Our customer choose to utilize SWIFT for transmission to the banks (CSFB only, we communicate directly with BONY). It should be noted that if the payment bank supports secure transmission via FTP and since Treasury Sciences EFT supports standard formats such as ISO 20022 and SWIFT MT files, you do not need to use SWIFT only for transmission- it may not be cost effective.

I will describe some of these features using screenshots from the application in a later post. Thank you for reading.

Hedge Fund Treasury, Multi bank payments, Netted Payments

Treasury Workstation - Multiple Currency Support - Rates

Sujith Nair — Tue, 21 Sep 2010 09:44:49 GMT

While demonstrating the product to potential customers who have multi-currency reporting, payments or positioning needs, a very common question that is asked is the ability to input, upload or integrate multi-currency feeds into Treasury Sciences products. This post addresses currency feeds and related integration options.

Treasury Sciences CMO allows end user administrators to setup currency rates in there different ways. You could input rates manually for each day or multiple times during the day and the system will use the last updated value as shown below.

Alternately, you could upload a list from a spread sheet- this option is typically useful if you utilize negotiated rates for multiple currencies for the day from your banking institution. As shown below, you would select the file and click upload. The file contains you base currency, the currency code for the converted currency and the rate.

Finally if you need a real time currency update, you could point to a third party web service- this could be one of the many currency feeds out there and you can get a real time currency update (note that additional parameters as needed to consume the feed can be configured as well). As you can see here, the TS system is consuming a web service (an internal test URL is shown below) from a third party source.

So, there you have it. Depending upon your need, you could either manually input currency rates, upload negotiated rates for the day from a file or setup an integrated, realtime feed.

Treasury Management System , Treasury Workstation

Treasury Management System Implementation for a Hedge Fund - Electronic Payments

Sujith Nair — Sat, 12 Jun 2010 17:36:51 GMT

We recently completed an implementation of our product suite (cash management operations module and electronic funds transfer module) for a large Hedge Fund. This customer uses our EFT module to make payments for margin calls, to manage excess collateral, netted transfers between accounts or to make vendor payments.

In this post, I will share some of the key implementation details of the electronic funds transfer module for this customer, hopefully this information would be useful for other organizations (especially hedge funds) that are planning on implementing an electronic payments solution.

Systematic enforcement of Payment Policies & Procedures: One of the primary needs of this hedge fund customer was the ability to systematically enforce their specific payment policies and procedures. Their policies of payment approval and release described a group of payment originators and another group of payment approvers. The originators would originate payments- either free form wires or wires based on pre-approved templates. One approver would then approve the payment and then the policies requires another approver from the same group of approvers to approve the wire again before systematic release to the payment bank. Note that template based originations made it easier to approve- i.e. the approver already knows that the template is approved which implies that all beneficiary information is approved, so all an approver has to verify is the specific value date and amount.

The TS product team configured the a 3-step workflow as described above and created 2 roles- originators and approvers. These are the only 2 roles that would now participate in the workflow (Yes, system administrators do not have any visibility into the payment approval or release process) .The procedure/policy implementation for this hedge fund customer is below:

TMS software needs to support configurable workflows and roles that can then be tailored to a customer's specific business requirements. If configurability is not an option, then either the customer has to live with a new process dictated by the system or spend significantly on customization.

Support for multiple payment banks: Ability to connect with multiple financial institutions to make payments and transfers while maintaining a seamless end user experience was another key requirement- well supported by Treasury Sciences EFT module. The additions we made for this implementation (and for future needs) was support for additional payment formats. EFT supports the ISO 20022 standard out of the box; now we have added support for SWIFT MT messages as well. Together with that we created a custom adapter for another financial institution; which will eventually be replaced by a standard payment message format (SWIFT MT or ISO 20022).

The key feature TMS's and financial institution's need to provide is the support for payment standards - a standards based implementation reduces time and cost and increases changes of successful implementation. From what I have seen so far, support for either the ISO 20022 (preferred because of the XML based implementation and improved definition) or the SWIFT MT format is required.

Netted Payments: The next key implementation need was the ability to net payments and transfers originating from an investment/portfolio management system (in this case it was Sungard's Virtual Portfolio Manager) and generate netted transactions to multiple financial institutions- the business benefit being the reduction in the number of transactions (wires) and thus cost. Netting capability for payments is a new feature that was introduced into the EFT module and here is a quick overview of its capabilities.

Some of the interesting challenges related to netting were in ensuring that the appropriate validations were in place so that a user does not net transactions that they were not supposed to be netted together, the ability to make sure that a netted transaction that was originated as a payment or transfer is not made available to be netted again, associating appropriate accounting treatments and approval processes to each payment. As part of the netting capability we introduced a transaction manager - a dashboard that lets users manage transactions, import, sort, filter and net. As has been our practice, we have made this functionality fairly configurable and ready to meet the next implementation challenge.

As a final note, one feature not to forget is Ad Hoc reporting capability. I have discussed the importance of reporting multiple times before, so would not go into details again. However would add that no business system or software should exist without a powerful and secure reporting engine- it solves so many problems and is typically very beneficial to users of the system.

Thanks for reading, I will discuss additional features and benefits in a later post.

Hedge Fund Treasury Worstation, Hedge Fund Treasury, Multi bank payments, Netted Payments, Payment workflow implementation

Enterprise Payments from a Treasury perspective

Sujith Nair — Mon, 06 Apr 2009 21:59:58 GMT

That is the title of our first white paper in the series of white papers on Treasury Management. You can read it here and if you have any questions or comments please let us know by posting a comment here. Also, here is a quick excerpt from it.