Windy City SummitMay 22, 2018

Andreas Lutz

TMS Bank Connectivity: Pros and Cons

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Andreas LutzChief Executive OfficerFides Treasury Serviceswww.fides.ch

Twitter: @AML070207

LinkedIn: https://www.linkedin.com/in/andreasmlutz/

FidesCONFIDENTIAL

• What corporates want from bank connectivity• Managing connectivity: channel considerations• The TMS value proposition• Third-party connectivity providers: pros and cons• Questions to ask your providers• Case studies

Agenda

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• Reliability• Automated processes for operational efficiency• Centralization• Security and compliance• Risk management

What corporate treasurers want from bank connectivity

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Corporate-to-bank channel considerations

Global Active

Corporate

Host-to-Host

Fax-Banking

SMS TANEBICS

Security

Token

SWIFT

E-Banking

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• Most commonly used communications protocol globally• Multiple connectivity options: ▫ Direct connections to banks▫ Cloud-based Alliance Lite2▫ Service Bureau model• A bank may be on the SWIFT network, but not part of SWIFT SCORE

SWIFT

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Best for: Service Bureau model for high volume of banks and accounts, AL2 for smaller volume of payments, Direct connections for large enterprises

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• Available from most banks• May be cost-effective, particularly if bundled with other bank services• Can be complex and time-consuming to implement• Lack of data standards, formats, and validations• Security concerns• Requires IT resources to manage and maintain

Host-to-Host

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Best for: connecting to a small number of domestic banks with high-volume transactions

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• Most commonly used channel for payments in Germany• Widely used in France, Austria and Switzerland; EU adoption is growing• No charge for transactions in Germany & France• Can be used to transmit SEPA payments• Offers a higher level of flexibility for corporates wishing to avoid being

locked in to one specific bank

EBICS

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Best for: high-volume transactions with German & French banks

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Global Active Corporate

Managing connectivity

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Global Banks & Payment ProvidersConnectivity Options

TMSor

ERP

BankConnectivity

Provider

SWIFT

Host-to-Host

EBICS

Others

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TMS value proposition: centralized control

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TreasuryManagement

System

Centralized Access

Risk Management and Mitigation

Optimized, Secure Payments

Better Cash and Liquidity Management

OperationalEfficiencies/Automation

Visibility Into Cash Position

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• Maybe you don’t need a TMS - or aren’t yet ready to implement one• Restrictions on supported protocols and formats• Faster time-to-market onboarding new banks• Flexibility to change vendors in future• Work with specialists who are experienced in dealing with different

connectivity channels and formats

Why opt for a third party connectivity provider?

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• What standards do you support? • Who are your bank partners and what

standards do they support?• What if I want to connect to a different bank

that uses a different file format?• How long will it take for you to onboard new

banks for us?• Are my bank connections portable to other

TMS solutions?

Questions to ask TMS providers

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• Which connectivity channels do you support?• Can you convert formats?• Can you connect to any TMS and ERP systems?• What is your implementation process like?• How quickly can you help us onboard banks and

accounts?• Do you have global reach?

Questions to ask connectivity providers

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There is no single right answer

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• In-house managed connections• TMS for bank connectivity• Bank connectivity provider• TMS + bank connectivity provider• ERP + bank connectivity provider• TMS + ERP• TMS + ERP + bank connectivity

provider• Any combination thereof

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Industry: Wireless & Broadband Communications Infrastructure

Headquarters: Boston, MA

Employees: 4,500

• Global connectivity:

• 35 banks

• 300+ accounts

Business Challenges• Fast business growth and decentralization• Need to consolidate and automate manual processes• Build connections with new banks that may not

adhere to standardized formats• Execute payments globally

Benefits• Unified treasury management system with one

vendor point-of-contact• Savings of 15 hours of time per week for treasury staff• Reduced business risk

Case Study: TMS + Treasury Aggregator Partnership

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Industry: Global payments

Headquarters: New York, NY

Employees: 1,000

• 50 bank & payment providers

• 500 accounts

• 150 currencies

• 200 countries

Business Challenges• Fast business growth and expansion• Aggregate data from a large number of diverse

providers• Enable treasury to analyze that data• Execute payments globally

Benefits• On-boarding of even banks using non-standard

connections and formats• Automation of manual processes• Faster transaction processing, communication, and

reconciliation• Bank connectivity integrates seamlessly with TMS

Case Study: Separate but Seamless

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Industry: Telecommunications

& Media

Headquarters: Luxembourg

Employees: 18,000

• Multiple ERP systems

• Multiple versions of ERPs

• No TMS

Business Challenges• Lack of visibility into global treasury operations• Too much time spent on manual tasks• Standardized on MT940s, need to communicate

with banks that use other formats• Decentralized operations

Benefits• Visibility into global cash flow• Centralized payment workflows for increased

control• Automated data aggregation and file conversion

with ERP integration• Improved operational efficiencies and reporting

Case Study: Bank Connectivity without a TMS

Fides CONFIDENTIAL

Fides100+ years of connectivity and multi-banking excellence.

Scalable multi-banking services since 1985

Connectivity to 10K banks globally

$5.5 Trillion+ in payments

processed annually

Audited by KPMG, SWIFT, Credit Suisse

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Including Payoneer, Trafigura, NCR, AES

and more

3,000+ clients worldwide

The only true Hybrid Service Bureau

Messages from 170+ countries reconciled

daily

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Fides offers a multi-network, dual-BIC option to help clients:

Eliminate gaps in SCORE readiness

Ensure global banking coverage

Increase speed-to market

Connect easily.

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Connect limitlessly.

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Does it make sense to be a SWIFT member?

Q & A

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Does it make sense to be a SWIFT member?

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