TMANE Conference 2014: "Nightmares in Finance - How to sleep tight again"

Nightmares in Finance
How to sleep tight again
TREASURY INTELLIGENCE SOLUTIONS | SMART PAYMENTS – BETTER DECISIONS
Leading cloud platform for managing corporate payments, liquidity and bank relations

Who is TIS?
227/05/2014 TIS© | Classification: confidential | www.tis.biz
• 50 Employees
• 8 Nationalities
• 3 Locations
…and counting

TIS Snapshot
Overview Key Facts
• Founded in 2010, based in Walldorf, Germany
• Leading cloud platform for managing corporate
payments, liquidity and bank relations
• Quick and easy implementation with SaaS
• Solution for midsize and blue-chip Corporations
• Rapid growth with excellent customer feedback
• Highest security standards: ISO 27001 certified
SOFTWARE AS A SERVICE:
FAST, SCALABLE, SECURE
ERP INTEGRATION
& SAP CERTIFIED
MULTIERP SaaS
MULTIBANK 0.2 TO 1.0+ M
DIRECT CONNECTIVITY IMMEDIATE COST SAVINGS
• Wytze Rijkmans, EVP Sales &
Marketing;
VP Central Europe Software SaaS
vendors, global sales expert
• Dr. Wolfgang Kalthoff, COO & co-
founder;
VP Program Management at SAP;
SaaS operations expert
• Erol Bozak, CTO & co-founder;
Director of Development at SAP,
cloud expert, holds 33 patents
• Jörg Wiemer, CEO & co-founder;
Head of Global Treasury at SAP;
20 years of treasury experience
Built by Experts

Cloud Innovation
Giancarlo Laudini, responsible for Pre-Sales Operations at
TIS, is a domain and product expert in the Payments, Bank
Connectivity, Bank Account Management arenas as well as
the SaaS (on-demand) Services.
With a strong multi-cultural knowledge, he has been in the IT
industry for over 15 years gaining international experience in
Cash Management, Electronic Banking and strategic
involvement in Global Payment Factory projects for large
multinational clients.
Email: Giancarlo.laudini@tis.biz
Giancarlo Laudini
VP Presales
Martin Postweiler
VP Product & Client Services
Martin Postweiler, VP Product & Client Services, joined TIS
in 2013. He previously was the Head of Financial and
Liquidity Planning at Deutsche Lufthansa AG.
Martin is well known in the treasury community in the
D-A-CH-Region (Germany, Austria, Switzerland), having
played an important role in establishing the TWIST Initiative
(Transaction Workflow Innovation Standards Team) in this area.
With TIS, he is constantly trying to make the lives of
Treasurers easier, enabling them to contribute strategically
to their company’s success.
Email: martin.postweiler@tis.biz
Presenting:

Agenda
I. Business Risks
II. Reasons
III. Remedies
IV. Return on Compliance

EBAM – THE PATH TO EFFICIENCY
Oct. 2, 2001:
Entire Swissair fleet (“Flying Bank”) grounded, due to
cash shortage
passengers stranded worldwide
Takeover by Lufthansa in 2005 →
I. Business Risk - Liquidity
36,000

II. Reason – Grounding for nothing?
“Management had no full visibility on its cash.
Swissair actually had a total of SFr 50m at its
disposal on the morning of Oct. 2nd “
Ernst & Young

I. Business Risk - Bribery
Violation of the Foreign Corrupt Practices act
Siemens was found guilty, CEO fired
damage$3-4bn

II. Reason – Why was Bribery so Easy?
“To avoid getting caught, Siemens used secret bank
accounts in places like Switzerland and front companies“
Reinhard Siekaczek, Sr. Mgmt.

I. Business Risk – No Flexibility
Sept. 15, 2008:
Police raid at KfW bank over an
automated payment of $500m
to Lehman
PR Nightmare (“Germany’s
dumbest bank”)
Two Board members fired

II. Reason – Why did they not act?
“Lehman quickly needs further liquidity
and equity. This is of vital importance for
their existence.”
Internal memo, Friday Sep 12, 2008
On Monday Sep 15, 8:37 local time, the transfer
was released. One hour after Lehman had filed
for Chapter 11.

III. Remedies
a. Visibility
b. Transparency
c. Flexibility

a. Visibility
Get the full Picture
Subsidiary
Subsidiary
Head Office
JV
Subsidiary
12 b$
Supplier Supplier
Supplier
Supplier
Customer
Customer
Customer
3 b€
3 b$
0,1 b$
1 b$
Supplier
Supplier

a. Visibility

a. Visibility – Lift the fog
• How much cash is on which
account?
• Investment/Debt?
• Total cash inflow from all
customers - across all entities?
• What is the payment behavior?
• How much money is paid to
which supplier?
• Working Capital
• Total net USD cash flow to be
used as natural hedge?
• Interest Rates
Liquidity Management Supplier Relations
Risk Management Customer Relations

b. Transparency – Key Questions
 Which employee is allowed to sign off?
 What is the specific limit per signee?
 What are the exceptions?
 How can you be sure that Accounting knows all bank accounts?
 How can you guarantee that the visibility and transparency
worldwide will be regularly maintained?

Compliance in Cloud? – What we often find @ Corporates
Process Landscape
Branches
Joint Ventures
Head Office
Subsidiaries
Banks
Shared Service Center
- No single “Source of Truth”
- Manual, paper based and
decentralized processes
→ No bank relationship overview
→ Potential compliance issues
→ Highly inefficient

How to get Transparency throughout the Entire Group
Centralized Bank Account Management
- Central repository
- Cleaned up data
- Audit-proof & streamlined processes
- Semi-automated workflows externally
→ Bank Relationship overview
→ Compliance
→ Efficiency
Corporation
Banks
Master Data & Documents
Signatories & Workflow
Reporting & Audit Trail

Transparency – The Full-blown Solution
Adding two “e” to BAM
→ Use of 15 XML messages
→ STP internally + externally
→ SWIFT, EBICS, H2H
Workflow & Inventory
Reporting & Audit Trails
Master Data & Documents
Electronic Communication
ERP Integration
→ One single “Source of Truth”
→ Multi ERP
→ No IT-Project (with SaaS)
Corporation
XML XML XML
Banks

c. Flexibility – Ability to react fast
 Transparency and Visibility
 Insights (in Real Time)
 Stop payments last minute or switch to another
bank at short notice
 T
 I
 S

A Nice Bouquet of Flowers?

Payment Challenges
Banking Formats, Protocolls and Security
Customer IT
ERP Complex Landscape
Banks
Legacy / TMS / HR
Manual
PaymentsFax Banking
On-premise integration solution and payment
systems
Various payment procedures
and systems.
Various information systems
are involved in cash
management.
Various e-banking payment
formats, protocols, channels
and security measures.
International expansion results
in decentralized cash
management and payment
processes as well as individual
bank relations.
ComplexityatallLevels
Situation
Lack of standardization and
manual processing as well as the
complexity of end-to-end
integration and centralization
result in…
reduced visibility into
corporate cash-flow and
liquidity
increased process- and IT
costs
increased risk of fraud
difficulties to comply with
changing regulatory
requirements (e.g. SEPA)
Challenges

Smart Payments
Innovation Across Banking Formats, Protocolls and Security
Customer IT
Agent
Customer/Partner
Implementation
SAP ERP
Plugin
ERP-Integration
Other ERP
and TMS
ERP
H2H, EBICS, SWIFT
Outgoing
Channels
Incoming
Channel
Processing
Engine
Meta ModelFormats
Communication
Protocol
Security IDOC PEXR2002
CSB34
BACS
SWIFT-MT
DTAUS
Format
Web Service
EBICS
SWIFTNET
…
H2H-FTPS
Protocol
SAML
PGP
…
…
3DES
Security
…
…
…
ISO XML H2H-HTTPS SSL v. 3.0
Banks
Solution

One Token – All Banks

What some of our customers say

c. Transparency – Visibility – Flexibility
Best Practice (Lessons Learned)

4. Return on Compliance

Compliance and Efficiency as Drivers to Bundle Treasury Activities
Ability to React Fast
TARGET COMPLIANCE LEVEL:
FOCUS ON RISK MANAGEMENT AND CONTROL PROCESS
TARGET EFFICIENCY LEVEL:
FOCUS ON COST REDUCTION AND VALUE CREATION
STANDARDISATION
• Standardized processes
• Harmonized (IT) systems
• Standardized payment
methods and formats
• Unified bank connectivity
CENTRALIZATION
• Centralized Treasury
• Payment Factory
• Platform for global
cash mgmt.
• Bank relationship
consolidation
• Central bank account
repository
AUTOMATION
• Paper to electronic
• Straight-Through-Processing

Compliance and Efficiency as Drivers to Bundle Treasury Activities
Ability to React Fast
FOCUS ON RISK MANAGEMENT AND CONTROL
PROCESS
TARGET COMPLIANCE LEVEL
FOCUS ON COST REDUCTION AND VALUE
CREATION
TARGET EFFICIENCY LEVEL
STANDARDISATION
• Standardized processes
• Harmonized (IT)
systems
• Standardized payment
methods and formats
• Unified bank
connectivity
CENTRALIZATION
• Centralized Treasury
• Payment Factory
• Platform for global
cash mgmt.
• Bank relationship
consolidation
• Central bank account
repository
AUTOMATION
• Paper to electronic
• Straight-Through-
Processing
Good Night, and Good Luck!

Please contact:
Question and Contact
How can TIS meet your needs?
Treasury Intelligence Solutions
GmbH
Industriestraße 39c
D-69190 Walldorf
T +49 6227 69824-0
F +49 6227 69824-97
info@tis.biz

TMANE Conference 2014: "Nightmares in Finance - How to sleep tight again"

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TMANE Conference 2014: "Nightmares in Finance - How to sleep tight again"