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Why M&A-Intensive Enterprises Need a Robust Technology Integration Strategy

21-09-2021| treasuryXL | TIS |

This article evaluates how the success of long-term M&A activity on the part of large enterprises is dependent upon their ability to integrate and connect the pre-existing technology stacks of newly acquired subsidiaries with their broader infrastructure. Chiefly, we evaluate how enterprises that regularly establish new subsidiaries and entities across the globe can ensure that the various finance, treasury, and banking solutions leveraged by these companies before the acquisition can be integrated and connected in a cost-effective and optimized fashion.

M&A Activity Remains a Top Priority for Global Enterprises

Although merger and acquisition (M&A) activity is fairly common in today’s business environment, it is typically large, global enterprises that leverage the strategy most frequently.

For organizations with billions in revenue and a steady stream of new investment, taking advantage of new market opportunities is often best achieved by acquiring companies that have already proven themselves successful in the field. In the case of the world’s largest enterprises like Microsoft, Apple, and Facebook, M&A activity comprises a significant portion of overall growth. In fact, Microsoft alone has acquired more than 216 companies since their founding, and Apple acquires a new company at an average rate of once every four weeks. Across other industries like staffing and HR, Fortune 500 firm ManpowerGroup has acquired four new companies in the past five years and 15 total companies over the past few decades.

But while an M&A-intensive business strategy might be advantageous for eliminating competition, increasing revenue, and maintaining growth, there are a variety of challenges that must be confronted in order for the model to prove successful in the long-term.

Of course, any M&A project undertaken by a company will face obstacles, most of which revolve around how to best integrate the employees, products, systems, culture, and customers of the acquired company into the acquiring enterprise. These challenges are typically what executives and business leaders focus on most during M&A projects, and for good reason. If employees and customers are dissatisfied with how the acquisition is managed or if the acquired company’s product line stagnates, it can quickly turn the entire project on its head and substantially hinder future profits and revenue.

However, in today’s digitally-oriented business landscape, the above factors are not the only concern for M&A-intensive enterprises. Instead, one of the core challenges confronting modern acquisition projects lies along the technology front.

This is particularly true when it comes dealing with finance, treasury, and banking technology.

Why is Financial Technology Complexity so Common for M&A-Intensive Companies?

When evaluating the operations of enterprises that regularly undertake new acquisitions, it’s easy to see how technology complexity can manifest itself.

Let’s quickly walk through a sample scenario.

Looking specifically at finance and treasury technology, suppose that a U.S.-based manufacturing firm decides to acquire an emerging competitor in Asia. Also suppose that this Asian competitor has been operating independently for several decades and has its own spread of regional entities, as well as a pre-existing set of back-office platforms and IT solutions. As such, the company is already using an ERP, TMS, and AP system, as well as a globally distributed network of banks and bank accounts.

Going a step further, now consider the diverse range of currencies, payment formats, and financial networks that the Asian enterprise uses compared to the acquiring U.S. company. Also, because the compliance arena in Asia is managed through a diverse and multifaceted set of jurisdictions, conducting financial operations in the region will require a unique approach to managing regulatory and sanctions processes, as well as data and payment security.

For the acquiring U.S. company, connecting the various systems and networks used by the Asian subsidiary with their broader technology stack will be no easy feat. To start, some of the systems in place at the Asian subsidiary may be hosted locally or even running on older, unsupported versions. If modern cloud solutions have not been adopted, then integration via open APIs becomes highly unfeasible and it will likely require extensive IT support to establish the connections. The same is true for integrating the various bank channels and payment formats in use by the Asian subsidiary into the enterprise’s global financial architecture. Accommodating the various risk, regulatory, and compliance measures in place across Asia will require even more support, as well as collaboration with multiple legal and banking teams.

The end result being?

Although a single acquisition of this scale may be manageable for a global enterprise with significant resources, those that consistently undergo new acquisitions will likely experience much more difficulty. This is because internal IT teams rarely have enough bandwidth (or budget) to successfully establish all of the required connections for every system. Instead, what often happens is after a few months or years, IT is forced to divert their attention from one acquisition to another, thereby letting a portion of outstanding system connections fall to the wayside.

Ultimately, this creates an environment where much of the data and information captured at the local or “entity” level will sit idle and siloed from the rest of the enterprise. Instead of real-time data access across their individual units and subsidiaries, finance and treasury teams at HQ will have to rely on manual submissions from field personnel to ascertain data. In some cases, it may take weeks for this information to be received, by which time it is often outdated.

In the long run, the impact of these technology limitations has far-reaching consequences for the broader enterprise, especially if such issues are present across each new subsidiary or locality that they acquire.

What are the Main Problems That This Lack of System Integration & Connectivity Cause?

Thinking through the above M&A scenario, suppose that a similar conundrum impacts each (or most) of the M&A projects that an enterprise undertakes. Eventually, the lack of automated connectivity and control between the enterprise’s HQ and each of their subsidiaries will result in significant financial issues, particularly in the below areas:

  1. Liquidity Management: If financial data related to cash positions and balances across a subsidiary and its underlying banks and accounts cannot be effectively transmitted to an enterprise’s HQ, then everything from cash forecasting and cash repatriation to short-term investing and risk mitigation will be impacted. If the enterprise does not know the exact amount of funds available across each entity, then it cannot effectively plan ahead to take advantage of investment or tax savings opportunities. Over time, losing out on these opportunities due to gaps in data quality and reporting can cost an enterprise millions of dollars every year.
  2. Payments Management: For enterprises that cannot accommodate the range of payment systems and formats in use by their subsidiaries or that struggle to connect with their bank channels and networks, a variety of pain points will occur. Common issues include a reliance on outdated formats that limit data quality and security, delays in payment processing that impact the timeliness of transactions and also constrain employee bandwidth, and an increase in operational costs for continuing to support legacy processes and channels. Additional security and compliance issues may also manifest themselves, as highlighted below.
  3. Security & Fraud Prevention: Without ample visibility into the payment processes and cash positions at each of a company’s subsidiaries or any centralized window for viewing this activity in real-time (or at least same-day), it becomes monumentally more difficult to identify and prevent fraud from occurring. If payments are initiated in disparate platforms at the local level and no overarching control or transparency is provided at the HQ level, then the threat of both internal fraud and external fraud increases exponentially.
  4. Compliance & Regulation: Due to the diversity of data management protocols, financial regulations, and sanctions policies that exist across each world region, a lack of payments standardization within an enterprise can result in increased legal and regulatory risk and also jeopardize their reputation and standing. Examples of data and payments compliance protocols for which non-compliance can result in severe penalties include OFAC sanctions in the U.S., GDPR data policies in Europe, and the recently introduced Personal Information Protection Law (PIPL) in China.
  5. General Financial Execution: If financial data is not automatically flowing between an enterprise and its subsidiaries, then every department and stakeholder with a need for this data is impacted. Accounting will be unable to track ledgers or financial statements, legal will struggle to manage regulatory and compliance issues, treasury will be hindered in their liquidity and payment processes, and the C-suite will lack the high-level financial data they need to make strategic decisions.

Although the above financial technology challenges present serious hurdles for M&A-intensive enterprises, there are solutions that can be put in place to alleviate the strain. One such solution includes the adoption of a modern Enterprise Payment Optimization (EPO) platform.

How Can the Complexity Caused by Global M&A Activity be Simplified & Managed?  

Because of the diverse systems landscape and limited IT bandwidth that often exists across M&A-intensive enterprises, achieving global visibility and control over finance and treasury operations requires a unique approach to connectivity and integration. In recent years, one strategy that has grown increasingly popular involves the adoption of an enterprise payment optimization (EPO) platform.

Modern EPO platforms are typically cloud-based solutions that sit above the other systems in an enterprise’s financial technology stack and manage connectivity across all their various back-office, banking, and 3rd party systems, including those at their entities and subsidiaries. Rather than connect every platform used within the enterprise to every other system, each solution need only connect to the EPO platform instead. This drastically simplifies the process of integrating new solutions with an enterprise’s tech stack and also automates the process of transmitting payments and financial data between any system that is connected to the EPO platform, including those used by different entities and departments.

Although the adoption of an EPO platform requires some up-front legwork, using a vendor like TIS ensures that the complexity of connecting to banks and various internal systems is almost entirely outsourced. This means that formerly difficult and time-consuming tasks that were a drag on internal IT teams (such as configuring and maintaining the links between new entity systems and HQ ERPs, HR systems, and TMSs) are now managed by the EPO vendor. As payment formats evolve or new regulations require changes in integration, EPO vendors like TIS automatically handle the upgrades and also manage the addition of new countries, banks, and users to an enterprise’s network as growth and expansion dictate over time.

Ultimately, by connecting all of the various banks and systems that comprise your financial technology stack to an EPO platform, you effectively ensure that regardless of where an entity is located or what local systems are being used, the data and information stored on their platforms is never left isolated or unaccounted for. And as older or outdated enterprise payment solutions are eventually replaced by newer and more upgraded systems, connecting them to the EPO platform in a similar fashion will ensure ongoing cohesion and connectivity across your global networks, even as various technology overhauls and system migrations occur at specific entities within the enterprise.

Once this type of EPO platform has been adopted, the ensuing benefits can be felt immediately by all enterprise stakeholders. Company-wide visibility to global cash balances drastically improves, liquidity management protocols become more streamlined, payments compliance and security features are standardized across all departments and entities, and the enterprise’s overall payments execution workflows become more automated and controlled.

Today, these capabilities are exactly what TIS is offering enterprises through our EPO technology suite.

Why is TIS the Ideal Solution for Simplifying M&A-Induced Technology Complexity?

TIS’ Enterprise Payment Optimization platform is a global, multi-channel and multi-bank connectivity ecosystem that streamlines and automates the processing of a company’s payments and subsequent reporting across all their global entities, banks, and financial systems. By sitting above an enterprise’s technology stack and connecting with all their back-office, banking, and 3rd party solutions, TIS effectively breaks down department and geographic silos to allow 360-degree payments and cash visibility and control. To date, the ~200 organizations that have integrated TIS with their global technology stacks have achieved near-100% real-time transparency into their payments and liquidity. This has benefitted a broad variety of internal stakeholders and has also enabled them to access information through their platform of choice, since the data that passes through TIS is always delivered back to the originating systems.

This systematically controlled payments workflow is managed by TIS for both inbound balance and transaction information and outbound payment instructions. Data can be delivered from any back-office system via APIs, direct plug-ins, or agents for transmission through TIS to banks and 3rd party vendors. No matter where you operate, TIS provides global connectivity by creating and maintaining compatibility with your required formats, channels, and standards so that organizations can connect with virtually any bank in the world.

Because of the deep connections that TIS maintains with internal systems such as ERPs or TMSs, external banks, and 3rd party vendors / service providers, the process of managing payments is simplified for every internal stakeholder. C-suite executives, treasury, accounting, AP, legal, HR, and other key personnel can access whatever financial data they need, exactly when they need it. And by automating this flow of information for both inbound and outbound payments, TIS provides the control and flexibility that enterprises need to function at their highest level.

Ultimately, the extensive experience and unparalleled integration capabilities provided by TIS enable enterprises to streamline their methods for managing payments and data across each entity and subsidiary. This has proven vital for a variety of TIS’ globally diverse clients, including Fortune 500 firms like ManpowerGroup and international NGOs like IFAW. And as these organizations add new companies, localities or seek to replace the underlying systems in use across various regions, TIS is there to help them manage the new integrations and connections, thereby ensuring a seamless transition and constant control over global payments and information.

In the digital world of enterprise payments, TIS is here to help you reimagine and simplify. For more information about how TIS can help you transform your global payments and information processes, please refer to the below resources.

About TIS

TIS is reimagining the world of enterprise payments through a cloud-based platform uniquely designed to help global organizations optimize outbound payments. Corporations, banks and business vendors leverage TIS to transform how they connect global accounts, collaborate on payment processes, execute outbound payments, analyze cash flow and compliance data, and improve critical outbound payment functions. The TIS corporate payments technology platform helps businesses improve operational efficiency, lower risk, manage liquidity, gain strategic advantage – and ultimately achieve enterprise payment optimization.

Visit tis.biz to reimagine your approach to payments.

 

Readying Treasury for Hybrid Work

20-09-2021 | treasuryXL | Kyriba |

To say that the COVID-19 pandemic changed the way treasury departments and companies operate is a massive understatement. Treasury, a function already accustomed to ‘doing more with less,’ began operating remotely—often with a skeleton crew as companies were forced to reduce headcount.

Once mass distribution of the COVID-19 vaccine began, companies quickly began to strategise over what their post-pandemic workforce might look like. While the rise of the Delta variant has thrown a wrench into many organisations’ plans to reopen, eventually, that new work model will take shape. And it might look drastically different than what has come before.

Here are a few things to consider.

A hybrid work environment will very likely be the new normal.

Research from Harvard Business Review found that 70 percent of companies—including giants like Google, Citi and HSBC—are moving to a hybrid model. Just as treasury teams needed to adapt quickly to operating from home, now they’ll have to adjust to having some team members in the office while others are remote.

CFOs have an eye on emerging technologies.

The remote working environment brought on by the pandemic prompted, or perhaps forced, many organisations to digitise their processes. In a hybrid work environment (that could revert back to a fully remote one if COVID-19 variants continue to emerge), finance chiefs will continue to call for better technological solutions. New research from Gartner found that 82 percent of CFOs plan to increase investments in digital capabilities. CFOs named artificial intelligence (AI) as the technology that they expect to have the most impact over the next three years. Kyriba users can apply AI and machine learning (ML) to key cash management tasks like reconciling prior day bank files with their expected cash positions. For organisations that process high volumes of transactions, handling this process manually can take hours. Kyriba’s solution can identify and resolve discrepancies in minutes, and it learns from the data so that eventually, little to no human interaction is required.

Treasury’s role expanded considerably throughout the COVID-19 crisis. 

More than 80 percent of treasury professionals said that greater value was assigned to treasury during the pandemic, according to the 2020 AFP Strategic Role of Treasury Survey. Furthermore, nearly 70 percent of respondents believe that treasury’s role will continue to be of greater significance. To maintain that influence over other, other departments, treasury professionals may need to revisit their soft skills. Just as employees may have faced difficulty giving presentations over Zoom, they may also find presenting in-person or to a mix of in-person and remote employees to be equally challenging.

Regional treasury centers might no longer need to be regional. 

While it can be convenient to house a treasury center to manage cash and FX hedging in a region with unique regulations, the COVID-19 pandemic may prompt organisations to rethink that approach. Since the onset of the pandemic, those remote working has surged; the Stanford Institute for Economic Policy Research found that 42 percent of the U.S. labor force currently works from home. And perhaps more importantly, it’s been incredibly successful for both employers and workers, according to PwC’s U.S. Remote Work Survey. Ultimately, this could mean that treasury teams may no longer see a need to centralise their operations regionally even after the pandemic ends.

Continuous remote work means fraud threats will remain elevated.

According to the 2021 AFP Payments Fraud and Control Survey, business email compromise (BEC) scams increased last year. This was likely due to the remote work environment making it more difficult to verify emails with colleagues. Security will continue to be paramount for treasury, particularly if it moves to a permanent model where some employees regularly work from home. Treasury teams will need to continue to use strong controls like multifactor authentication, single sign-on and virtual private networks to ensure that only the appropriate people have access to their systems. Additionally, treasury employees must be even more meticulous about setting approvals for payments so that fraud attempts will be thwarted. With Kyriba Payment Fraud Detection, treasury can stop fraud in real-time. Users can set pre-defined detection rules, to screen for suspicious transactions. Additionally, ML algorithms can identify and quarantine dubious payments for further review.

The cloud provides a failsafe for business continuity planning (BCP). 

Cloud-based treasury management systems aren’t only efficient modules to help treasury teams track cash and liquidity. They are also a key cog in BCP. Cloud-based solutions like Kyriba’s are hosted offsite in multiple locations, allowing your treasury department to function regardless of whether your team is working in the office or from a dozen different locations. So even if a new COVID-19 variant emerges, treasury teams can continue to function without interruption.

Making a Game Plan

While it’s unclear how soon offices will begin opening back up en masse, now is the time for treasury teams to begin planning for the shift. When the pandemic first hit, treasury functions had to respond quickly, and they did as best they could. Pivoting in this next phase won’t be seamless, but with the right protocols and technology in place, treasury teams can make smooth transitions.

Why might you use a market order?

09-09-2021 | treasuryXL | XE |

If you’re making a payment in a volatile market and aren’t operating under a deadline, you may want to consider a market order for your next money transfer.

If you need to send money overseas, sending it on the spot and crossing your fingers for a good rate isn’t your only option. (Thank goodness!) There are several ways to get the most out of your foreign exchange transfers, whether you’re hoping to get it done by a certain date or get the best possible rate. One of such is the market order, and it’s available to everyone. But what exactly is a market order and how does it work?

What is a market order?

Remember how we described forward contracts as the “buy now, pay later” transfer option? Market orders would be the “buy now, transfer later” option.

When you make a market order, you can specify your target rate at which you’d like to exchange your currencies. The current rate doesn’t matter: the markets are constantly moving, and you’ll never know when your desired rate will be live.

After you’ve placed your market order and set your target rate, your work is done, and now it’s up to the markets. Once your rate is live, your currency will automatically be purchased, allowing you to transfer currency at your ideal rate.

Why use a market order?

The foreign exchange market is volatile and unpredictable. Nonetheless, you can monitor the market and come up with a clear-cut currency strategy that allows you to get the most out of your foreign exchange transactions, without having to constantly check the rates.

With a market order, you can easily set an exchange rate you want for your currency and once your target is met, the transaction is initiated automatically. This gives you the opportunity to get the highest value for your currency regardless of how volatile the market is.

Key things to note about a market order

  • It allows you to customize your market order by setting the amount, exchange currency, value date, and validity.

  • You can choose a desired target exchange rate to either stop-loss, make -profit, or get the best of both.

  • Your market order triggers automatically once your target rate is reached.

  • Since the process is automated, you’re not required to keep monitoring the market for the best rates.

  • You can sit back and relax without bothering about the volatile nature of the foreign exchange market!

A market order allows you to get the best out of sending money at your most preferred exchange rate and to prevent the undesirable effects of the unstable foreign exchange market. Once you set a market order, the online money transfer platform such as Xe monitors the foreign exchange rate movement, automates and completes the transfer on your behalf once the set rate is reached.

It’s an opportunity for you to benefit from an automated foreign exchange management system with minimal exchange rate risks.

When should you use a market order?

You can use money order just about any time you want. However, certain situations make a money order the preferred choice for sending money. Here are the most preferred periods to use a money order:

  • To get the best of higher rates

  • To save money and time

  • To make the most of foreign exchange purchase

  • To create a safety net

  • To get the most out of your budget

  • To take advantage of favorable exchange rate

  • To manage foreign exchange risk

Depending on the currencies you want to transfer and what’s going on in the world at the time, your currencies could be subject to quite a bit of volatility. If you’re contending with frequent market motion, setting up a market order can help you to ensure that you’ll be able to make your transfer at the best possible rate, whenever that may be.

Market orders are also a great option for transfers that aren’t time-sensitive. Some transfers (such as bills or educational payments) need to be made by a certain date, but if your transfer doesn’t come with its own hard deadline, you can take advantage of market orders to make the most of your money in your transfer.

Why should you take note of currency risk management?

Managing the risks associated with the volatile nature of the foreign exchange market is important to get the best rates for your money transfer. This is one of the key reasons why the market order is such a good option. Here are key reasons why you should consider currency risk management using a market order:

  • All your foreign transfers will be based on strategic decisions.

  • You’ll be able to forecast your international expenses.

  • You’ll know precisely what foreign exchange range will be used for your transfer.

  • You’re not required to keep monitoring the market to get the best rates.

  • Market order is automated so you aren’t bothered about missing the best rates.

  • You can use the volatile nature of the market to your advantage.

Is a market order the best option if your transfer is date-focused?

No.

Unlike several other available money transfer methods, a market order isn’t the best option if you intend to transfer your money within a specific date. That’s if your money transfer has a deadline.

For example, some payments such as overseas mortgage, school fee or an emergency medical bill require payment within a specific period. Once you miss such a deadline, you’ll have to deal with the consequences that follow.

In such situations, a market order isn’t the best method for transferring your money. However, if your transfer doesn’t require any deadline or specific dates, a market order could be your best bet. Market orders are mostly suitable for money transfers that aren’t time-sensitive. It provides a perfect opportunity to sit back and wait for the best market rates before your transfer goes through.

How do I create a market order?

Ready to set up a market order? It’s no more complicated than sending any other money transfer. If you don’t have an account, take just a few minutes and sign up for your free account first. If you’re already registered, visit our Money Transfers page to learn more about how you can get started.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you the detailed information.

 

 

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Strategic Treasurer’s Analyst Report Series: Treasury and Risk Management Systems

06-09-2021 | treasuryXL | Kyriba |

This document contains a comprehensive illustration of the current state of treasury technology and the exciting future direction using new tools that are already with us. This FinTech analyst report from Strategic Treasurer takes a look at the current health of the TMS space and what benefits can come from implementing a treasury management system in your operations. Additionally, this report covers emerging technologies within treasury, such as the use of robotic process automation, artificial intelligence, and more.

Understand the current TMS space and its benefits

The Treasury and Risk Management Systems Analyst Report offers a thorough evaluation of the TMS space by covering the emerging uses of AI/ML (artificial intelligence and machine learning), RPA (robotic process automation), and API (application programming interface) technologies in treasury.

It also discusses:

  • The place of a TMS/TRMS in business continuity planning and preparing for disruption and volatility
  • The best practices and proper mindsets for avoiding pitfalls in selecting, making a business case for, and implementing treasury technology
  • The varied ways in which these solutions address the day-to-day pain points and inefficiencies of treasury departments

Download it now!

How global enterprises can finally end the cycle of redundant IT-related payments projects

30-08-2021 | TIS |

This article begins by examining the current state of enterprise treasury and finance technology implementations, including the standard project timelines, core challenges, and ultimate outcomes. This is followed by an analysis that outlines an improved methodology for enterprises to follow as they seek to ensure the global optimization and standardization of their payment systems, workflows, and technologies.

Modern enterprises are stuck in an endless cycle of payment technology upgrades

 

For enterprise finance and treasury professionals, why does it feel like the road to payments automation and technology optimization is never complete?

If you’re an active practitioner, you’ve likely asked yourself this very question (or at least a variation of it) within the past few years. Perhaps it was during a very long and arduous TMS or ERP implementation, a major acquisition of a new entity, or a rationalization of your global bank relationships. In any case, your musings were probably due to the fact that these types of projects have become an all-too-regular occurrence (and a subsequent thorn in the side) for enterprises around the world.

As recently as 2018, data showed that the average corporate timeline for a SaaS-based TMS implementation was 10-18 months. Technology overhauls involving larger and more widely used systems, such as global ERPs, may have taken up to 3-5 years. And although these respective timelines continue to grow shorter as cloud services and other innovations rise to the forefront, projects of this magnitude still represent a massive undertaking.

During these periods, it’s common for practitioners to wind up collaborating with dozens of internal and external stakeholders, joining hundreds of calls, and spending countless hours training, testing, and configuring the new system – all while continuing to perform their core list of daily responsibilities.

The ultimate result being?

Although seasoned professionals will tell you that every implementation is different, let’s think about the bigger picture. Of course, the results of each specific project can vary drastically, sometimes for reasons far outside of anyone’s control. There may be budget constraints, bandwidth constraints, technical limitations, and even geopolitical or environmental obstructions. Employee turnover may cause undue delays as well. And yet other times, the entire project may flow smoothly and on budget from start to finish.

But looking beyond the individual success or failure of any single project, how long after each project’s completion will it be until a new technology implementation is required?

One year? Two years? Five years?

Or, in the case of global enterprises, perhaps you are simultaneously working on numerous financial technology implementations all at once, and the completion of one only results in your reprioritization of another.
Unfortunately, this endless cycle of new technology and payment upgrades is what most enterprise treasury and finance teams find themselves dealing with today, and it has become one of the primary sources of confusion and headache for global companies.

Let’s quickly evaluate the underlying complexities in more detail.

Why does global expansion often lead to excessive payments complexity?

 

Although domestic companies operating in a single country or region undoubtedly face their own degree of technology and payments complexity, the level of difficulty associated with managing a global network of systems, data, and information is exponentially greater.

What are the main reasons for this?

To begin, consider the sheer volume of payments being made across a global enterprise, including all the various locations, currencies, and payment types. For the largest companies, there may be millions of inbound customer payments occurring every day through a combination of cash, check, card, and account-to-account options like ACH and SEPA. At the same time, an equally large and diverse variety of outbound payments must be generated by the enterprise to compensate employees, vendors, and partners. And every time a new entity, industry, or market vertical is added to the mix, these volumes intensify.

Adding further complexity, consider how the payment channels and formats in use across each world region can vary broadly as well. Just to name a few, there is EBICS in Europe, NACHA in North America, SWIFT for international payments, and H2H (direct) connections that may be utilized globally. Local variations of these channels also exist in other regions, and going a step further, each of the specific banks used by an enterprise will have its own connectivity preferences for payments and information reporting. Individual clients, partners, and vendors may also request payment data to be created in specific formats such as SWIFT MT, ISO 20022, EDI, BAI, and BAI2.

Measure Payments Complexity

Finally, the diverse compliance and security standards that exist across various countries require unique filtering and monitoring workflows to be established in different regions. Although U.S. companies may be familiar in dealing with OFAC sanction lists, FBAR statutes, and data privacy laws like GDPR, the regulatory landscape in Asia, Africa, and the Middle East looks quite different. In fact, each specific country within these regions might have its own distinct set of rules and restrictions, and these protocols must closely adhere to any time that payments data and technology solutions are managed locally.

But despite all these challenges, perhaps the largest source of headache and confusion for enterprise practitioners stems from attempting to manage a disparate and unintegrated web of back-office payment solutions.

What do we mean by this?

The back-office conundrum: too many solutions and not enough integrations

 

In 2016, research from Fortune highlighted that global enterprises were undergoing merger and acquisition (M&A) activity at incredible rates, with the five most active companies absorbing 122 new entities between them on the year. Data from more recent years showcases a similar story, and at the same time, organic growth is also driving these enterprises to open new offices, enter into new markets, and expand into new world regions.

The challenge?

As these new acquisitions and locations ultimately go on to form new company entities and subsidiaries, the underlying systems used at each locality must be connected to the enterprise’s main technology stack in order to facilitate data transmission, cash and payment visibility, and other core financial functions. But for enterprises with hundreds of already-existing entities and a steady stream of new acquisitions, consider how many systems must be connected to the enterprise’s core technology stack each year. Also consider the amount of maintenance, upkeep, and investment that managing this global network of technology requires. And finally, reflect on how each of these systems will gradually become a legacy over time and need to be replaced as new technologies and solutions rise to the forefront of the industry.

We know from experience that not all of these global systems are able to connect or integrate with one another. Perhaps some solutions are too old, the budget too insufficient, or IT bandwidth is stretched too thin to prioritize the development of proper connections. As a result, it may take days, weeks, or even months for the data and information contained within these local systems to be made available across the entire enterprise. And if these siloed systems are not isolated occurrences but actually comprise a significant portion of the enterprise’s back-office infrastructure, then almost every single financial and payments-related function will be impacted.

EPO Payments Complexity

Without automated connectivity and integration, visibility to cash balances and payment statuses will take a hit. Creating a standardized compliance and security process will be almost impossible, and stewarding the company’s liquid assets will be hampered by a lack of transparency to global data.

Today, these siloed entity technology stacks and legacy systems are often the unintended result of sustained business growth. In fact, it’s almost natural for them to occur. However, with today’s speed of change in commerce and technology, it is no longer an option to leave each of these functions, systems, and geographies unconnected. Siloes trap data, reduce communication and visibility, and ultimately stifle growth. And in the world of payments and technology, a lack of visibility and automation will directly impact liquidity, profitability, and exposure to risk across the entire enterprise.

So then, for enterprises that find themselves in this situation, what is the best approach to optimization?

Introducing a new framework for managing enterprise payment maturity

 

In a perfect world, enterprises that need to connect all of their global technology and payments solutions, including bank platforms and 3rd party solutions, would simply integrate every system with every other system. This would effectively enable complete unification and connectivity across the enterprise’s entire network, and data could flow immediately and seamlessly across any department, entity, and location for real-time visibility and control.

Of course, active practitioners understand how unrealistic this approach would be. In reality, it would require an almost endless variety of custom integrations to be established across each internal system and potentially hundreds of banks and external solutions. Despite innovations surrounding APIs and other connectivity methods, this task would still be insurmountable, from both a budgetary and bandwidth perspective. And even if an enterprise did somehow manage to connect all these solutions together, the maintenance and upkeep required to sustain each integration would require a whole army of dedicated IT personnel and even more investment.

An alternative solution?

Given the fragmented systems landscape that exists across most global enterprises, the most effective way to achieve a holistic view of (and control over) every siloed process, system, and geography is by implementing a single Enterprise Payments Optimization (EPO) layer that sits above all other solutions in an enterprise’s technology stack. Rather than connect every platform with every other, each solution need only connect to the EPO platform instead. This drastically simplifies the process of integrating new solutions with an enterprise’s tech stack, and also automates the process of transmitting payments data between any system that is connected to the EPO platform, including those used by different entities, offices, and departments.

Although the adoption of an EPO platform requires some up-front legwork, using a vendor like TIS ensures that the complexity of connecting to banks and performing other technical functions is almost entirely outsourced. This means that formerly difficult and time-consuming tasks that were managed by internal IT teams (such as configuring and maintaining the links between external banks and internal ERPs, HR systems, and TMSs) are now managed by the EPO vendor. As formats evolve or new regulations require changes in integration, EPO vendors like TIS automatically handle the upgrades and also manage the addition of new countries, banks, and users to an enterprise’s network as growth and expansion dictate over time.

Once this type of implementation has been performed, the EPO platform can become the sole channel through which all company payment workflows and data streams are managed and controlled.

TIS Eliminates Global Complexity

As payment instructions or files from ERPs and other back-office systems pass through an EPO platform, they can be quickly transferred to the appropriate bank or end party. In addition, data can be shared with 3rd party vendors and other companies and partners within the network. Subsequent bank statements and reports can also be transmitted from the bank through an EPO platform to the various internal departments and systems where payment instructions are originating from.

Ultimately, the information stored on an EPO platform serves as the single source of truth for payments data across all corporate departments, subsidiaries, and geographies, and it prevents enterprises and their IT departments from having to manage a tangled mess of disparate back-office connections.

EPO solutions provide the perfect option to support ongoing enterprise growth and expansion

 

While the EPO orchestration strategy outlined above is very effective at breaking down geographic and entity-specific siloes, it is also the ideal platform for fostering a strategic, long-term approach to enterprise payment maturity.

Today, the technology landscape continues to evolve rapidly, as do the payment solutions and methods used by global enterprises. In the current era, this means that approximately once every decade, a company’s existing technology infrastructure will need to be overhauled. However, because various internal solutions are installed at different times and for different purposes, the upgrades and maintenance schedules for these solutions are rarely conducted in an organized and timely fashion. Sometimes, these upgrades are not completed at all. And as a result, it’s very easy for an “optimized” payment workflow and the underlying technology stack to start falling behind the curve.

This is why adopting an EPO orchestration layer is so essential for maintaining a constant state of consistency and control.

By connecting all of the various internal systems that comprise your global payments technology stack to an EPO platform, you effectively ensure that regardless of where an entity is located or what local systems are being used, the data and information stored on their platforms is never left isolated or unaccounted for. And as older or outdated enterprise payment solutions are eventually replaced by newer and more upgraded systems, connecting them to the EPO platform in a similar fashion will ensure ongoing cohesion and connectivity across your global networks, even as various technology overhauls and system migrations occur at specific entities or locations within the enterprise.

So, if you’re a treasury or finance professional working for an enterprise with significant process, system, and global complexity — complexity that is ultimately hindering your ability to operate efficiently — ask yourself whether a new approach to payments technology could be the answer.

And if that answer is yes, we invite you to consider TIS and our newly introduced Enterprise Payment Optimization (EPO) platform.

About TIS

TIS is reimagining the world of enterprise payments through a cloud-based platform uniquely designed to help global organizations optimize outbound payments. Corporations, banks and business vendors leverage TIS to transform how they connect global accounts, collaborate on payment processes, execute outbound payments, analyze cash flow and compliance data, and improve critical outbound payment functions. The TIS corporate payments technology platform helps businesses improve operational efficiency, lower risk, manage liquidity, gain strategic advantage – and ultimately achieve enterprise payment optimization.

Visit tis.biz to reimagine your approach to payments.

 

Identifying Types of Fraud/Scams

26-08-2021 | treasuryXL | XE |

Knowledge is power. When it comes to avoiding scams, forewarned is forearmed. Here are a few common types of scams that criminals will use to try to steal your money or – more importantly – your identity.

1. Give Money to Get Money

If you ever receive an “official” notification that you’ve won a lottery or that someone wants to generously give you a large sum of money but first you need to send money to cover taxes, fees, clearances, or some other cost before collecting your prize, proceed with extreme caution!

The common thread with this scam, apart from the too-good-to-be-true offer, is that you must “act now” or respond immediately to the official sending the notice. This scam relies on you feeling pressured to not miss out on the deal or prize.

One of the most well-known versions of this type of scam is the Nigerian Prince (also known as the 419 Scam).

2. Phishing

Phishing is almost what it sounds like. Someone is fishing – and using bait – to obtain sensitive information to steal everything from the cash in your bank account to your identity.

Phishing scams replicate official-looking emails (or other communication types) from well-known and reputable companies. These fake emails include links or phone numbers encouraging you to change passwords or send personal documents and information (to update your account). The email will make some claim that there is an issue with your account (i.e. you need to supply documents to receive funds being remitted to you) and you need to click on the link provided to fix the problem. These links may take you to a look-alike site created by the criminals or contain malware (malicious software) which can give the criminals access to your computer (so don’t click!). Phone numbers may work the same way by directing you to a fake answering service.

There are a number of sub-species of the Phishing scam:

a) Spear Phishing

Spear Phishing is a little more sophisticated as it specifically targets you and relies on the trust you’ve built around a person, company, or brand. Most likely the communication will be personalized. Criminals target you from information they have found on sites like social media.

b) Clone Phishing

Clone Phishing differs in that it will copy a legitimate email that included an attachment or link. The attachment or link is replaced with a fraudulent version and the email is sent from a disguised address that appears to come from the original sender. The email may claim to be just a resend of the original or even an updated version.

c) Whaling

Whaling goes after the “big fish”. It targets senior executives or high-profile people within in a company. This type of fraud usually appears as a legitimate concern such as a legal request or subpoena, client issue, or corporate matter.

d) SMiShing

Cute name, not so cute fraud tactic using text or SMS. Potential victims receive an unsolicited text or SMS message with a link to a site that can contain malware or viruses. The urge to click is usually based on a “confirmation” of account activity and the risk of incurring additional charges or fees if the intended victim doesn’t take care of the problem immediately (by clicking the link).

3. Fear-Based (Service Cut Off/Jail Time)

You receive notification, usually through email or phone, that your account is in areas and you need to pay the balance immediately or have the utility service cut off. This type of fraud includes claims of unpaid taxes requiring immediate payment to avoid jail time. Criminals in this case are dependent on your fear of losing a necessity, like heat or water, or your personal freedom.

Conclusion

The ultimate goal of the criminal is to rob you. Criminals will try every sneaky tactic to get what they want and will play upon your fears, your generosity, or your trustfulness to get it.

Scammers attack when you’re least expecting it and often prey on the most well-intentioned people. Educate yourself on how to protect yourself and your loved ones from unexpected fraud. Here are several resources that provide helpful information:

Remember, no matter who is contacting you, NEVER give them any of your passwords, account numbers, or personal information without double-checking their identity first.

Be smart, be aware, and be safe!

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you the detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

A Culture of Fraud Prevention: It’s Everyone’s Responsibility

23-08-2021 | treasuryXL | Kyriba |

It seems like every day there is a new fraud headline. As a result, companies are learning that preventing fraud needs to be a responsibility of all employees in the organisation. To prevent fraud, an organisation needs to focus on education through training, standardized controls, and IT policies on top of a strong technology solution.

The threat of fraud has grown dramatically in recent years. In fact, according to the 2021 AFP Fraud and Control Study, overall, 74% of companies have experienced fraud or attempted fraud. Your organisation needs to be prepared and Treasury activities need to support identifying and preventing fraud. Recently, I had a conversation with a Treasurer who said, “if it’s (fraud) not on your mind in Treasury, you’ve already lost”. He went on to talk about how much more difficult it is to manage fraud when you have a decentralized Treasury team.

Best in class fraud prevention is about having a strong overall ecosystem, culture and technology – the fabric of an organisation. Fraud prevention must be top of mind for everyone in the company. Specific training should be included in introductory orientation as well as ongoing training and annual awareness campaigns. Individuals need to be able to identify potential phishing and Business Email Compromise (BEC) campaigns to ensure they don’t become victims.  It only takes one person to make a poor judgment call to allow access into a company’s system. It’s also important to consider cultural differences for offices in other parts of the world. Fraudsters are taking advantage of cultural norms. In some Asian countries it’s natural to defer to individuals with seniority. For example, receiving a message from the CFO to make a payment wouldn’t normally be questioned. Make sure that all individuals have a way to share, escalate and/or stop a transaction when there could be potential problems.

Standardised procedures are essential. With BEC, fraudsters assume that using the name and email of senior members of the management team, such as the CEO or CFO, will cause employees lower in the organisational hierarchy to do as instructed without question. To combat this, it is imperative that the procedures set up require strict adherence, and that senior management provides an environment where fewer senior members of the team are comfortable asking whether a payment is legitimate. If multiple ERP systems exist, ensure that consistent approval processes are in place across all systems. For smaller regional offices, set up procedures and approvals to ensure that separation of duties is in place and that you have visibility to the activities in remote offices. Some fraudsters like to target attacks on regional offices in hopes of bypassing some of the more stringent processes that are in place at headquarters.

 

Having an IT focus on fraud prevention and policies that support these efforts is also essential. IT should ensure that employees are password protected and that their passwords aren’t easily guessed. They should maintain strong firewalls and keep current on technology to identify potential hacker activity. In addition, it is helpful to randomly test employees with phishing emails to assist employees in recognizing fraudulent emails.

Finally, technology solutions to identify fraud are a critical component of fraud prevention. Solutions should include rules-based fraud detection that identifies multiple scenarios, for example situations where a vendor bank account number has changed. These transactions should be flagged and sent for validation. An individual should call the company using a phone number that is listed in the system of record. Or, the transaction should be sent for account verification allowing for confirmation that the bank account is owned by the organisation that is to be paid, and not some fraudulent entity. Account verification is a new tool that is being added to rules engines. It allows you to increase your confidence that the account is owned by the entity with which you have a relationship without having the time-consuming process of having to reach out to the entity directly to verify. The verification is quick and doesn’t slow down legitimate payments. Your fraud technology solution should also identify other fraud situations that you and a community of your peers have experienced or considered.

Machine learning to identify payment anomalies based on transaction history is also critical. It allows for patterns to be identified in the immense amounts of transactional data that your organisation has accumulated and then to match that in real-time to your specific transactions to identify potential fraud. This added layer of protection looks for behaviours that may not be identified by the human eye – timing of invoice receipt or change in the frequency of payment requests. The system continually adapts based on the information that it is tracking and provides suggestions when it identifies potentially fraudulent behavior.

Fraudsters continue to attack since they only need to find that one weak link on one day with a single person in your organisation. It’s up to you to make sure that the individuals in your company are prepared for the attack. Ensure that you have a training program that helps your employees identify potential fraud attempts. Define, monitor and enforce policies that support segregation of duties and consistent processes throughout the organisation. Confirm that your IT department is staying on top of technology that identifies and prevents hackers and supports best practices when establishing policies across the organisation. Last, but certainly not least, make sure that you are utilizing best-in-class technology to identify potentially fraudulent payments to stop those payments from going out your door. Some treasury solution providers use the terminology fraud detection tools to refer to having sanction screening or workflow tools in place while others notify you of a fraudulent item after the transaction is sent to the bank. A best-in-class technology solution combines workflow tools and approvals in addition to a robust rules engine and machine learning to identify potentially fraudulent transactions in real-time. Giving you an opportunity to stop any transaction before it leaves your organisation.

Preventing fraud is something that everyone in your organisation needs to commit to in order to prevent fraudsters from being successful.

How to Start Avoiding Payment Fraud from Happening

| 18-08-2021 | treasuryXL | Nomentia |

It’s 2021 and even with advancing technologies and AI detecting fraudulent behavior, payment fraud remains an ever-present Risk for any company.

The other day we met with someone who has recently been a target of Payment Fraud and is now implementing a payment factory in order to reduce the risk. We wanted to take a look at how we approach the subject with our solution. Having the right software in place is important, sure but it goes beyond technology.

Let’s start with the Software, Nomentia’s Cash Management solution has several mechanisms in place that protect you against fraud.

Here’s a Quick list

  • First of all, our software creates a single point of managing all payments. We talk a lot about centralizing, and this is just that. Our product brings all these payments into a single view. If we think of a typical case, a company might upload some payments to internet banks, some to a service bureau, use host-to-host connections for others and maybe even run some payments via SWIFT. That creates at least 5 times X channels where payments are executed. This means all payments can’t be seen from one view, which already makes it impossible to detect fraudulent or suspicious payments. But in addition, those 5 times X channels also mean 5 times X places where user rights need to be maintained and controlled.
  • This brings us also to the second point; our software comes with a comprehensive user and user rights management. Our software creates a clear structure and visibility as to who has rights to which companies and accounts and what kind of user roles they are having. We create visibility and an easy way to maintain those rights.
  • When payments are transferred from one source system such as ERP, payroll and the likes to our cloud, files cannot be altered. This creates additional security measures that protect companies from attacks.
  • Lastly, we have created capabilities to set up straight forward approval flows that ensure a segregation of duty into the way payments are done, within the users’ approval limit. Approval limits can be set for each user when working in different roles for multiple companies.

Those are the things that come built into our software. But it’s important to highlight one key fact, most fraud attempts have a human factor and that’s why it’s important to look beyond the software and take a critical look at the processes. As a matter of fact, despite all the noise about external risks, fraud and theft are more likely to be committed by an internal actor than an external actor (Source: FBI Internet Crime Complaint Center).

In other words, if you focus on validating data for possible fraud, you probably should take steps to minimize the possibility of fraud in the first place. Otherwise, proverbially speaking, it’s winter (Northern Finland winter for that matter) and you are going out in shorts and with wet hair.

Apart from controlling user access rights, we would like to share some more tips and ideas that can help to mitigate the risk of fraud.

  • Payments that are made from ERP but rejected by the bank cannot be modified by all users. In practice this means when a payment is made from the ERP system but rejected by the bank, it bounces back where users need to review the failed payment, before sending it to the bank. Fixing the payment data on ERP master data instead of manual adjustments. This would highlight and prevent for example internal fraud attempts.
  • Consider working with your system admins to install payment templates that your end users can use. This decreases the risk for fraud and error by limiting the manual work of filling in information.
  • Make use of the full audit trail that we provide. You can see the whole lifecycle of a payment from its creation to its reconciliation, including by whom and which changes were made, who has approved and sent the payment.
  • Create clear rules on manual payment creation. We enforce a 4-eye approval flow before sending it. In manual payments, there might be a reason to have more than 2 persons approval. If you are having SSC’s in use or even multiple SSC globally. Use the standard 4-eye approval flow locally but have additional approval from another SSC to reduce the internal actor.

These are a few ideas from our side. We are always happy to hear more ideas and feedback on how we can together create safe payment processes.

DOWNLOAD PAYMENT FRAUD E-BOOK

 

 

Strength in Numbers: A Community-Based Approach to Fighting Digital Payments Fraud

11-08-2021 | TIS |

This article provides a modern review of the tactics used by cyber criminals to target enterprises with fraudulent schemes and also evaluates the primary methods used by companies for defending against digital payments fraud. This is followed by an introduction to TIS’ innovative Payee Community Screening (PCS) solution, which addresses payments fraud on a global scale by curating a community-based network of trusted beneficiaries, vendors, and bank account information that enterprises can use to verify the legitimacy of their outbound payment instructions.

Enterprise Payments Fraud in 2021 is More Elaborate & Subversive than Ever Before

Within the past year alone, thousands of finance and treasury practitioners across the world have learned through bitter experience that digital payments fraud is rarely orchestrated by your average, everyday criminal.

Rather, the vast majority of today’s technology-oriented attacks, particularly those that target large enterprises, are led by sophisticated, well-funded, and innovative fraudsters.

In many cases, these software-savvy perpetrators are working on behalf of state-sponsored actors or underground “black-hat” organizations. And because these groups are well-organized and well-funded, they can provide members with the latest technology and training. Ultimately, this has led to rapid digital innovation within the criminal underworld, and subsequently to a growing frequency of highly-orchestrated payments fraud attacks against the corporate environment.

Consisting primarily of software hacks or malware attacks, many of the most prevalent forms of fraud in existence today involve numerous layers of subterfuge and deception, which is necessary for bypassing the various security controls that organizations have in place. Common examples include the use of cleverly disguised Business Email Compromise (BEC) schemes, “Man-in-the-Middle” tactics, invoicing fraud, and the use of ransomware or other forms of “system takeover” fraud.

But of course, enterprises are not entirely helpless in defending themselves.

What Payment Security Tools Does a Modern-Day Treasury Group Utilize?

If you’re operating in a role with direct access or authority over an enterprise’s outbound transactions, you could probably name a broad number of tools at your company’s disposal for detecting and preventing payments fraud.

Some quick examples?

When initially establishing internal payment protocols, most companies will require clear segregation of duties between each stakeholder in the payment process. This includes dual or multi-user approval controls for executing, reviewing, and approving payments. Other standard security components, such as the use of encrypted Wi-Fi networks or VPNs, help restrict access to the enterprise’s digital software to only trusted sources. IP safe-listing tools provide even greater control over who can access these internal systems. As users log in, configuring multifactor authentication (MFA) tokens to be used in conjunction with standard usernames and passwords is another effective technique that prevents unauthorized users or personnel from accessing payment systems via stolen credentials. Biometric versions of these MFA tokens, such as fingerprint or retinal scanners, may be leveraged for even greater security. And finally, user auditing software is often adopted by companies to help monitor the activity of various personnel within their payment systems in order to detect suspicious activity, such as a login attempt from an unknown IP address, at an odd time of day, or from an obscure world region.

Treasury Payments Security

When all combined together with regular employee testing and training, these various security techniques have proven very effective for combating most forms of digital treasury and payments fraud in existence today. And in the years ahead, these tactics are expected to remain as core features of most enterprise’s fraud prevention strategies.

However, suppose that the criminals targeting your organization are not launching direct attacks against your internal payment systems or architecture, but instead decide to infiltrate the operations of your suppliers and partners.

Their reasoning?

Although your enterprise might have the appropriate defenses in place for preventing direct hacks and internal breaches, are your controls just as effective at identifying anomalous activity that is perpetrated through the guise of a trusted vendor?

For a surprising number of enterprises today, the simple answer is no.

Successful Fraudsters Learn How to Operate Outside the Purview of Enterprise Visibility

Although many of the fraud attacks that garner widespread media attention are those that result in millions or billions of losses in a single swoop, these are not the only types of attacks that organizations should be worried about.

In reality, many of the attempts perpetrated by criminals are not targeting billions of dollars. Instead, they focus on extracting smaller amounts of funds over time, often by disguising their activity through the lens of normal business operations.

Take, as an example, fake invoices submitted by criminals that are designed to mimic one of the thousands of vendor or supplier payments that a global enterprise makes every month.

Usually, vendors are submitting invoices to enterprises via email, an online e-commerce platform, or via an ERP system. Subsequent payments are then delivered from the enterprise to the various recipients whose invoices have been approved, usually as an account-to-account transaction that goes directly to the bank account listed in the invoice.

However, suppose that a criminal is able to infiltrate the email account, e-commerce platform, or payment system used by one of your vendors. And over time, the criminal monitors the activity and communication that occurs between this vendor and your enterprise and learns how to mimic the workflow, presentation, and delivery of new invoices for payment.

In this scenario, the criminal knows that your company is receiving hundreds, if not thousands, of new invoices from a variety of vendors every day. They also know the average dollar amount of each invoice delivered by particular vendors, as well as the frequency and timing of their submissions. And if an email account or e-commerce platform has been hacked, they have also probably been studying the language and messaging that the vendor uses to correspond with you.

After taking time to evaluate these invoicing and communication processes, the criminal will create a falsified invoice using the same email address or payment platform that you’re familiar with. The invoice will probably be for the same amount and to the same beneficiary that you’re used to paying, but with a slight variation to the underlying bank account details.

The typical result being?

Unless you are actively tracking and inspecting the vendor records, bank account numbers, and beneficiary details for EVERY payment initiated by your enterprise to your global network of partners and vendors, then catching these attempts will be incredibly difficult.

But if your company cannot catch this errant invoice the first time, then what is going to stop the criminal from submitting numerous invoices over and over, or even going on to target other vendors within your network and duplicating the process on a broader scale?

It might sound like an Ocean’s 11 heist on paper, but in reality, these types of attacks occur all the time. In fact, a single instance of invoice fraud cost Amazon nearly $20 million in 2020. Other forms of fraud, such as BEC schemes, cost a combined $12.5 billion for organizations in the same timeframe, and these numbers are not decreasing over time.

Instead, they are continuing to rise.

Introducing a New Way to Quickly Identify Suspicious or Fraudulent Payment Details

Although subversive types of fraud attacks like the invoice example above are difficult for large companies to identify, suppose there were a way to quickly scan all vendor and supplier payments in real-time against a global library of beneficiary and bank account data?

Going a step further, what if you could also scan outbound transactions being delivered to first-time vendors against a community ledger of payments data in order to verify that the underlying account details and remittance info have never been flagged as suspicious or fraudulent by other enterprises?

With this functionality, the threat of fraud being perpetrated through more obscure and subversive channels become much easier to identify, and they go a long way in protecting your enterprise against attacks that spawn through exposures related to your partners, vendors, and suppliers.

This suite of tools is exactly what TIS is now providing enterprise clients with our innovative Payee Community Screening (PCS) solution.

Developed in direct response to a noted increase in invoice and BEC fraud, TIS’ PCS network works by aggregating payments data across our trusted community of global enterprises and bank partners. As new payments are submitted by various enterprises through TIS, this module compares the underlying beneficiary and bank account information against a comprehensive record of all other transactions executed through the system, including those made by other enterprises in the network.

In practice, this validation process effectively protects against four fundamental threats:

  1. If you are making payments to a new beneficiary or bank account for the first time, an alert will be generated by the system warning you that an additional review of the information is recommended.
  2. If you are making payments to a beneficiary which is completely unknown to other members of the PCS network, then the payment is flagged and a review workflow is initiated.
  3. For new vendors that you are paying for the first time, if the invoice and payment details do not match what other enterprises in the network have used to pay the vendor (i.e. a different bank account number was provided to your enterprise than what was provided to other enterprises in the network), then the payment is flagged and a review workflow is initiated.
  4. If the beneficiary or bank account details provided in an invoice ever match with a known criminal, sanctioned, or otherwise fraudulent party, the payment is automatically flagged and a review workflow is initiated.

In this way, by inspecting every outbound payment initiated by your enterprise in real-time against a global library of payments information, enterprises can strengthen their security controls by accessing a much broader pool of data and information than what is available in-house. To date, TIS’ network has managed over 11 billion payments globally across 11,000+ banks and 15 million+ distinct beneficiaries, which makes our library of payments information virtually unparalleled in the market. And now with the addition of PCS to our solution suite, we can better protect our enterprise clients from fraud by confirming the validity of every outbound transaction they are attempting to make.

TIS Payee Community Screening

In an environment where subterfuge and deception are a criminal’s main assets, these community screening techniques are essential for ensuring that fraudsters cannot bypass your controls simply by infiltrating those of a different company within your network. They also ensure that as soon as fraudulent or suspicious payment info is identified by one enterprise, the data can be quickly shared across all other enterprises in the network for purposes of quickly halting subsequent payments to that account or beneficiary.

For TIS’ enterprise clients, these tools are already becoming a pivotal component of their core security structure, and we are excited to continue deploying the solution across more global enterprises in the months and years ahead.

Learn More About How PCS Can Bolster Your Treasury & Payments Security

Although no single tool should ever be relied upon to defend against all forms of fraud, it is strongly recommended that enterprises making hundreds or thousands of vendor payments every day undergo a thorough evaluation of their payment controls. More specifically, treasury and AP teams should take time to analyze whether the threat of invoice or BEC fraud leaves them exposed, especially if a vendor or supplier within their network is compromised.

For enterprises that identify gaps, we invite you to learn more about how TIS can help.

For more information about TIS’ PCS tool, the associated benefits, and the technical aspects associated with its architecture, download our latest factsheet. You can also request a meeting with one of our payment experts or learn more about the other security-related components of our solution suite.

Stay vigilant, stay safe, and as always, thank you for reading.

About TIS

TIS is reimagining the world of enterprise payments through a cloud-based platform uniquely designed to help global organizations optimize outbound payments. Corporations, banks and business vendors leverage TIS to transform how they connect global accounts, collaborate on payment processes, execute outbound payments, analyze cash flow and compliance data, and improve critical outbound payment functions. The TIS corporate payments technology platform helps businesses improve operational efficiency, lower risk, manage liquidity, gain strategic advantage – and ultimately achieve enterprise payment optimization.

Visit tis.biz to reimagine your approach to payments.

 

Kyriba Webinar: How Connectivity-as-a-Service Can Help In ERP Migration

25-02-2021 | treasuryXL | Kyriba |

4th March • 2pm GMT • 3pm CET

In this webinar Kyriba and Deloitte will discuss some of the challenges and time constraints faced in bank connectivity and outline how Kyriba’s Connectivity-As-A-Service can accelerate global banking connectivity projects by more than 80%.

The agenda will follow:

  • The Connectivity-as-a-Service challenges
  • The Kyriba Connectivity Network
  • A case study on implementation with Deloitte

REGISTER NOW to understand more of the issues related to cost-control, deployment, security and bank connectivity when embarking on large-scale ERP cloud migration projects.


Date:

March 4, 2pm GMT/ 3pm CET

Contact: