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Liquidity Management

Umicore – a global materials technology and recycling group

Streamlining bank communication channels by migration to SWIFT


About

Umicore is a global materials technology and recycling group. The company’s industrial and commercial operations, as well as R&D activities, are located across the world to best serve its global customer base.
 

The Challenge

Umicore’s treasury team recognized that its decentralized treasury processes and lack of .xml file format standards were hampering the company’s ability to maximize liquidity, drive efficiency and best support global business operations.

Accordingly, the company launched its global cash management RFP in 2017 with the goals of achieving enhanced visibility and fully automating the concentration of cash globally. A further objective was to streamline bank communication channels by migrating from various bank’s electronic proprietary platforms to SWIFT and enhancing the version of SAP used globally by the company’s subsidiaries.

Implementation of the .xml standard file format across all subsidiaries and countries was seen as crucial to achieving desired efficiencies across the treasury organization as well as making the ultimate solution relatively bank agnostic.
 

The J.P. Morgan Solution

Following the RFP process, Umicore selected J.P. Morgan to manage all the USD flows of the Group globally and to implement a USD cash concentration offshore.

In terms of connectivity, J.P. Morgan supported Umicore through the entire migration process to SWIFT, including integration with the company’s SAP system and thorough testing protocol. The initial testing phase was streamlined by using the SWIFT MyStandards approach.

The scope of the project included both SWIFT FIN (MT101 messages for Treasury entity) and FileAct set-ups for payments and reporting (wires, ACH and camt053 for prior-day reporting for all Umicore subsidiaries). Thorough SAP integration work was performed in order to allow all Umicore entities to seamlessly use the same version of SAP.

The Impact

Umicore’s liquidity and cash concentration function has truly been optimized using today’s market standards and the latest file formats (i.e. .xml). Umicore has also been able to deploy SWIFT in more challenging countries in Asia, such as China, which allowed the payments to be managed by the payment factory in China.

The overall solution delivered the following benefits:

  • Deployment of a bank agnostic solution that can be easily leveraged in case of a banking partner change
  • Rationalization and streamlining of bank communication channels - by migrating from multiple tools (electronic proprietary bank platforms, Isabel) to a unique SWIFT channel - and facilitating the deployment of the same ERP (SAP BCM)
  • Standardization of file formats as well as payment processes used by Group subsidiaries
  • Facilitating the set-up of a more ‘industrialized’ payment process by rolling-out an ultimate solution to all Umicore entities globally
  • Helping develop the Payment Factory model and enhancing the role of the in-house bank (POBO/ROBO), as well as leveraging the Shared Service Centre organization
  • Reinforcing internal controls (minimizing fraud / risk of human error) by having strong end to end processes from booking to payment approval
  • Optimizing overall processes to dedicate more time to added value tasks, thereby helping achieve recurring cost savings

The SWIFT migration has brought considerable benefits to Umicore, helping it to secure, streamline and harmonize processes as well as putting in place a standardized IT architecture globally across the Group.

 

J.P. Morgan is the marketing name for the Treasury Services business of JPMorgan Chase Bank, N.A. and its affiliates worldwide.

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