Hunting, an international energy services provider, has connected to SWIFT using SMA Financial’s SWIFT service bureau and IT2 Treasury Solutions, with Barclays Commercial as its lead bank. The project aims to deliver greater automation and straight-through processing (STP) enabling Hunting to gain better visibility and control over its global cash management.
Hunting has a number of subsidiary companies located in different countries across the globe. Before implementing the SWIFT connectivity solution, the company was still receiving cash forecasting reports from the subsidiaries in Excel spreadsheets via email. At an industry conference 18 months ago, Hunting learned that it could enhance the functionality of the IT2 treasury management system (TMS), in place since 2001, and use it to generate payments from IT2 through the SMA service bureau and onto the SWIFT network.
In an interview with gtnews, Chris Berris, assistant group treasurer, Hunting, said: “One of the main benefits was around STP, which has become a prevalent issue in treasury technology and is the concept that forms the main objective of this project. From a compliance point of view, it is useful that the board of directors and then the auditors can look at our policies and procedures and see that there are reduced levels of human intervention, effectively improving accuracy and efficiency. Another pain point we wanted to address was transaction cost. By going directly through SWIFT connectivity, we could reduce the tariff charged by our banks to transmit payments using their proprietary systems. We also have greater visibility over the payments themselves in terms of the messages we receive from SWIFT. However, above all, we hope that this functionality will help us to deliver a truly global cash management solution as we, as an organisation, continue to expand.”
Hunting did not consider purchasing the hardware itself mainly because of the overhead associated with the technology, both in terms of implementation and maintenance. “We don’t have a dedicated IT department – all that responsibility is outsourced. Discussions held early on with SMA Financial revealed that the technology required would be quite cumbersome and expensive, and quite simply we don’t have the resource to install and maintain it. We felt it was far easier to outsource to SMA Financial,” said Berris.
With the assistance of SMA and Barclays Commercial Bank, Hunting has joined SWIFT as a corporate member via the Standardised Corporate Environment (SCORE), which will provide access to most of their leading cash management banks. It has also joined Barclays’ member administered closed user group (MA-CUG) because it needs to receive a specific message type MT998, which is not available on the SCORE model, in order to receive relayed bank statements from other banks.
Phase 1 of the project to establish SWIFT connectivity in the UK is on target to be completed by October, if not before, which is a six-month roll-out period. Once that has been completed, Hunting will look at extending it to their 10-12 overseas offices within another six months.
Berris explained that the group is on an acquisition trail and has bought two new companies this year – National Coupling Company and PT SMB Industri – which is another reason why Hunting looked towards a SWIFT solution. “We have a sizeable cash surplus that we are looking to re-invest in growing the company. We implemented this solution so that we can easily obtain an accurate and timely view of the bank accounts held by any companies brought in to the group. With SWIFT, we aim to communicate with all our banks from one central point from one platform, so we don’t need to implement a number of banking systems. We knew that we would be acquiring companies and that they would probably have banking structures locally – SWIFT can help us connect to them relatively easily with just some minor configuration to the static data held in our TMS,” he said.
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