Critical Thinking for Treasurers with Strategic Treasurer & Kyriba: Payments

Proprietary & Confidential: Strategic Treasurer, LLC © 2015

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Webinar SeriesCritical Thinking for Treasury: Managing

PaymentsPresented by

&


Upcoming WebinarsFall 2015

Next Webinar: November 2015

Building the Business Case Date2:00 – 3:00 PM EST1.2 CTP Re-certification credits


Craig A. JefferyManaging PartnerStrategic Treasurer

Today’s Speakers

Bob StarkVice President

Kyriba

Global Treasury Management

Treasury & Risk

Technology

Financial Risk Management

Working Capital

Optimization

Staffing FBAR Filing

Implementation Support

DART: Dashboard


Agenda

Changes in the Payment Space

Standardization & Scalability

Fraud Issues & Concerns

Q&A


Changes in the Payment Space


Scope & Growth

0% 10% 20% 30% 40% 50% 60%

Treasury

Invoicing

Payments

Cash Reporting

None

We intend to make significant information technology investments in the next year in the following areas:

2013 2014

30%

25%

19%

14%

11%

0% 5% 10% 15% 20% 25% 30% 35%

Less than 1,000 per month

Between 1,000 and 10,000 permonth

Between 10,000 and 100,000per month

Between 100,000 and1,000,000 per month

Over 1,000,000 per month

Our monthly check payment volume falls most frequently into the following range:

2015 Rapid Research: Check & Check Signature Survey2013-14 Cash Forecasting & Visibility Survey


Treasury vs. A/P

• Low Volume• High Value

• Distribute Repayments• Internal Payments• Cash MGMT Movement• FX Settlements• Deals

• Wire• Account

• High Volume• Low Value

• Check • Card• ACH

• Rent Payments• Payrolls• Supplies• Etc.

Treasury Types Types of Payment

A/P, P/R Types Typical Payment


Formats

BAI: fixed location, positionalSEPA (XML) Example: flexible format description

Newer formats add value over time through increased efficiency and flexibility and less time spent chasing down files which have rejected. Date in the enriched file formats has the label with it <Dt>2015-10-11</Dt> (is October 11).

• Dependent on tags rather than placement and order in the file, an error in one tag or an accidental omission by the bank will no longer cause an entire file to reject.

• Date in the positional files is determined by location, ,860621, is June 21st in the 4th record of the header.


Standardization & Scalability


Payment Flows

TMS

Treasury

PMTs

DebtFXCash

Accounts Payable

ERP

Order Received A/P

Print USPS USPS

Communications

£ $ €

£ $ €

Payment Flows

Banks

Banks

SWIFT

Vendor


Payment Centralization

Centralization of Payments = Convergence of Treasury & Supplier Payments into a standardized workflow

Primary Drivers

Shared Services/POBO

Cost reduction

Improved visibility

Fraud prevention

Treasury

Accounts Payable


Payment Centralization

Centralization of Payments = Convergence of Treasury & Supplier Payments into a standardized workflow

Primary Drivers

Shared Services/POBO

Cost reduction

Improved visibility

Fraud prevention

Treasury

Accounts Payable

Features

Centralized connectivity via payment hub

Multiple connectivity channels

Intercompany transactions (on behalf of)

Standardization across all banks, geographies, payment types


Payment Controls

1. Data Security

Encryption of data ‘at rest’

Encryption of data in transit to/from banks

Physical layers of security – including separating people from data

2. Application Security

“don’t lose your password…but if you do, don’t let that be enough to access your systems”

Strong password controls

Multi-factor authentication

IP Filtering

Separation of duties – approval limits


Regional Differences in Approach

North America

• Historically disparate payment workflows

• Globalization/Fraud driving payment centralization

• Ease of connectivity

Europe

• Strong history of payment factories

• Trend towards format standardization (e.g. SEPA)

• More complex connectivity

Asia

• Varying degrees of sophistication

• Much manual processing

• Regions like China quickly “catching up” with CIPS

• Disparate connectivity


Regional Differences in Approach

Domestic Payments

• Centralized payments out of US

• Minimal banks

• Host-to-host connectivity

Growing Internationally

• Payments still driven from US

• Banks start to increase

• Additional connectivity channels (e.g. SWIFT)

Globalized treasury

• Decentralized payments shared services

• Payment factory/POBO model

• Difficult to centralize visibility & control

• Multiple connectivity channels


Sources of Confusion 1. Equivocation of Terms

Payments

• Card

• Wire

• ACH – LVP

• Check

Connections & Integration

• File Transfer

• EAI

• API

• Full Integration


Sources of Confusion 2. Payment Challenges


Fraud Issues & Concerns


Weakest Link? BYOD

Point of Exposure

• Computer

• Laptop

• Tablet

• Phone

Target Hack

• HVAC System

28%

50%

31%

14%

8%

39%

0% 10% 20% 30% 40% 50% 60%

Information viewing.

Email access.

Event Notification

Transaction approval (example wires)

Transaction initiation (example wires)

None of the above.

Bring Your Own Device. Our company allows treasury to do this for (check all that apply):

From the 2015 Ongoing Global Treasury Fraud & Controls Survey. *Responses as of 9/15/15


Imposter- Man in the Email

31%

58%

11%

0% 10% 20% 30% 40% 50% 60% 70%

No attempts.

Some attempts, no success.

Yes, we suffered a loss.

Has your organization experienced any type of impostor fraud / man in the email attempts or

otherwise in the past two years?

From the 2015 Ongoing Global Treasury Fraud & Controls Survey. *Responses as of 9/15/15


File Exposure

Manual User

$

Area File

File Exposure

Data Access – Validating PMTs

Controls within the system

Controls Outside the system

$

Checks

Approving PMTs and PMT Register within the

systemSigning a PMT register

Change Key Info Bank

Bank


Questions & Answers


Craig Jeffery, Managing Partner, Strategic [email protected] | +1 678.466.2222

Bob Stark, Vice President, [email protected] | 604.916.2760

Kelsey Stephens, Marketing & Webinar Management, Strategic [email protected] | +1 678.466-2234

Contact Information

mailto:[email protected]


