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Market movements could impact your business—stay on top with Rate Alerts
06-05-2020 | treasuryXL | XE |
Rate Alerts are a quick, simple way to monitor the changing values of your choice currencies, without having to constantly check the markets.
If your business purchases goods or services from overseas, makes income from overseas, or deals at all with foreign currencies, exchange rate movements can and will impact your business and its bottom line. The degree to which they’ll affect your business will depend on the types of transactions you’re making, the frequency of your transactions, and the currencies that you most commonly work with. But if you aren’t aware of the latest changes in the currency markets, your next payment could be quite a bit more costly than anticipated.
While it is crucial to monitor the values of the currencies you work with and stay on the pulse of movements in the currency markets, we understand it’s not always feasible to keep an eye on them. The currency markets are constantly in motion, and currency values can change multiple times per day, or even multiple times per hour. Who has time to constantly check the latest rates?
Fortunately, you don’t need to devote your time to monitoring the markets. With Xe’s Rate Alert tool, we can handle it for you, so you can devote your time to your business.
What are Rate Alerts?
Rate Alerts are a quick, simple way to monitor the changing values of your choice currencies—without having to constantly check the markets.
At Xe, we know the currency markets, and we’re happy to keep an eye on them for you. All you need to do is identify which currency pairs you’d like to monitor and your target exchange rates, and we’ll take care of the rest. We’ll watch the markets for you and notify you the moment your ideal rate is reached.
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Why set up a Rate Alert?
By setting a Rate Alert, you’re ensuring that you’ll know when it’s a good time to make your transfer. The currency markets can be volatile, and one change in currency values could have a dramatic impact on how much your business needs to pay for one transaction. If you have some flexibility in the timing of your payment, Rate Alerts will help you to determine when the rates are most favourable, so you can make the most of your money.
In addition to helping you save money, Rate Alerts will also free up valuable time. Rather than frequently checking the markets and poring over historic currency data, you can take just a couple of minutes now to set up your Rate Alerts. You’ll know as soon the rates are in your favour, without ever having to take time away from your business.
How to set up a Rate Alert
If you have your Xe account, signing up for a Rate Alert is quick and simple.
Sign in or sign up. If you haven’t registered, don’t worry. It’ll take just a few minutes.
Head to the Rate Alerts section. If you’re using the Xe app, you’ll enter through the ‘Charts’ tab.
Select your currency pair and set your target rate. You can either manually enter the rate you’d like or select a point on the chart.
Sit back and wait. We’ll be in touch as soon as your rate is reached.
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About XE.com
XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.
Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.
Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.
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 detailed information.
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Liquiditeitsbeheer en Cash Forecasting | Beheer en controle van de liquide middelen, kredietlijnen en -termijnen
| 05-05-2021 | François de Witte | treasuryXL |
Hebt u een goed overzicht van de liquiditeitspositie van de onderneming? Is er geen sprake van een versnipperde cash- en kredietbenutting die u een onvolledig beeld geeft? Bent u onlangs geconfronteerd met liquiditeitsproblemen als gevolg van onverwachte uitgaven? Tijd om in actie te komen!
De coronacrisis stelt de situatie heel scherp. Heel veel bedrijven lopen tegen liquiditeitsproblemen aan. En het zijn vaak niet de minste! Zelfs grote, succesvolle ondernemingen hebben in de praktijk vaak onvoldoende zicht op hun cashpositie.
Omschrijving
Wilt u de liquiditeit van uw bedrijf verhogen? Dan loont het de moeite om uw huidig beleid eens goed onder de loep te nemen. Door een goede opvolging benut u de cash van het bedrijf optimaal en houdt u het beslag op de kredietlijnen zo beperkt mogelijk.
Met onze specialist staat u daar niet alleen voor! Als uw bedrijf groeit, groeit ook de complexiteit. Hoe gaat u de versnippering van uw kaspositie tegen? Hoe gaat u om met de complexiteit van multi-bancaire relaties en internationale handel? Dankzij deze opleiding vindt u de beste (gepersonaliseerde) aanpak voor uw bedrijf.
Voor wie is deze opleiding bestemd?
Deze module richt zich tot bedrijfsleiders, alsook alle financieel verantwoordelijken, treasurers, leden van het treasury team, controllers, financieel adviseurs, accountants, relatiegelastigden ondernemingen bij financiële instellingen.
Voorkennis
Financieel basisinzicht en ervaring met financiële transacties is vereist. Voelt u zich hier nog onvoldoende mee vertrouwd dan kan u voorafgaand de opleidingsmodule “Cash- en werkkapitaalbeheer” volgen.
Bijkomende info
Het programma komt in aanmerking voor 9 uren permanente vorming bij ITAA.
Programma
Lesdata
François de Witte
Bank connectivity – why it is not a one-size-fits-all issue
04-05-2021 | Luca Crivellari | treasuryXL |
Corporate to bank communication is still a very pressing issue in cash management. There are several alternatives that allow corporates to interface and exchange data with banks, and most of the times it is complex for treasurers to identify the best choice. The consequence of not adopting the best setup might be to receive inadequate or old information, or the inability to have the right level of control over the issue of payments. The aim of the article is to assist treasurers in identifying all the relevant variables, and to take a decision that factors in all the possible impacts of each alternative.
Introduction – Why bank connectivity is still a hot topic?
In 1973, over 200 banks from 15 countries created a cooperative body with the aim of easing the communication among banks. This organization was born under the name of SWIFT, the Society for Worldwide Interbank Financial Telecommunication.
SWIFT enables its customers to automate and standardize the processing of financial transactions, thereby lowering costs, reducing operational risk and eliminating inefficiencies from their operations.
The rise in global trade was the main reason why financial institutions were pressed by defining a common standard for international payments and reporting, and the aim was to avoid lengthy conversions, useless charges and operational inefficiencies that might derive from the use of different standards.
Fast forward to today, SWIFT is the undisputed backbone of financial markets, with over 11,000 financial institutions and corporations in more than 200 countries, processing a record of 46,3 million messages in a single day on the FIN service. SWIFT messages are nowadays used for both bank-to-bank and corporate-to-bank communication, and the organization has developed dedicated categories for messages that are related to payments, cash management, foreign exchange, trade finance, treasury markets, and securities.
Overtime, several other organizations with a similar aim were created, at national or international level. It is worth to mention the CBI (Customer to Business Interaction, former Corporate Banking Interbancario) consortium in Italy, and the EBICS (Electronic Banking Internet Communication Standard) protocol in Germany.
We still live in a world of different standards and practices, where corporates often struggle in navigating among the different options they have when it comes to issue a payment or to receive a piece of account statement. This article is meant to be a guide for corporate treasurers on how to select the right connectivity setup, because there is no such a thing as a universal optimum, and every alternative has its own advantages and its own shortcomings.
From the experience I gathered during the last years of conversations with several corporates based throughout Europe, one of their most relevant priorities is to consolidate an accurate picture of the liquidity available in the company bank accounts, on a daily basis. Too many organizations, including some with a relevant experience in international business and with a very important turnover, are still relying on Excel files shared on a monthly basis, in order to get the information of the balance that is sitting in a certain bank. In a world where business is changing rapidly, this can be an issue.
Moreover, the ever-changing technology landscape is adding complexity to the issue. New trends as the API-based connectivity can definitely allow a more efficient exchange of information, shortening the gap to a real time treasury, while the migration from MT to MX messaging standard is going to heavily impact how payments are going to be settled in the near future.
In conclusion, bank connectivity is still a hot topic because it is yet perceived as being a complicated issue by many corporates, and there is a clear need for treasurers to figure out all the relevant variables before choosing the most valid option for their company.
The alternatives on the market
Years of innovation and progress in information technology and financial markets have developed a wide array of possible bank connectivity services. In order for a treasurer to take the most educated choice, it is essential to list and examine all the options available. The list goes from the simplest to the most complex.
Additional features that an e-banking platform might have are, for example, the possibility to manage direct debit mandates, or to place FX dealing orders to the bank.
Most of the e-banking solution in the market are endowed with a scheduler function that allows to exchange files with external systems such as the Enterprise Resource Provider or the Treasury Management System.
Companies that are relying on an e-banking platform for bank communications should carefully examine the range of functionalities that are included in the solution, when looking for a bank to work with. Corporate e-banking platforms developed by international banks might be more adequate for companies with international business, while domestic banks might develop functionalities that are more fit to the domestic market.
Another variable to consider is the technology that runs behind the platform. Most banks are nowadays offering web-based solutions that are more flexible and easier to maintain than hosted solutions.
The main advantage of relying on e-banking connectivity is the fact that it requires virtually no effort for the channel to be available, especially if it is a web-based service.
Although it is a very practical solution, companies that have multiple banking relationship will need to activate multiple e-banking platform to issue transactions from these bank accounts. Another shortcoming is that the availability and the security of each e-banking platform relies on the systems of the bank who is providing the service, and this can be a potential risk if the financial institution is not disciplined enough to run a highly secure infrastructure.
This possibility is often developed by multinational banking groups, that might allow to reach bank accounts within the same banking group via a single e-banking solution.
Alternatively, some banking communities have developed country-wide standards that allow the possibility to manage all the bank accounts that a company has in the country with a single e-banking channel. This is the case of Italy with the CBI service.
Technical advantages and disadvantages of this solution are essentially the same of the e-banking connectivity that was described in the previous point.
It is important to bear in mind that a dedicated host to host connection can be a resource intensive solution to maintain, therefore it is key to agree with the partner bank who is responsible in the maintenance of the service, and which is the minimum uptime contractually agreed.
Having a host to host connection with a specific bank means that the company is clearly trusting the security protocol of the financial institution. Connections of this kind are normally secured by an encryption protocol, and this makes a host-to-host connection generally more secure than an e-banking connection.
Being part of the SWIFT network means for a company to be identified with a specific SWIFT code, the same identifier that is normally used by banks.
It also means that a company can securely exchange files with several banking partners from a single channel, and for this reason a SWIFT connection is the preferred option for companies that have implemented a central payment factory.
Two separate services are used within the SWIFT network: the FIN service is used to exchange single MT messages to banks connected to the network. This service is normally used to receive account statements such as MT940/2.
The second service used is called FileAct, and it is the service used to exchange any kind of file to banks. This service is mostly used for bulk payment files such as XML.
Joining the SWIFT network as a mean to consolidate payment operations in the company headquarter or in a shared service center can definitely bring efficiencies, but at the same time it makes sense to go through this road only if the company has the necessary resources to maintain a SWIFT connection overtime, or if it is willing to outsource the maintenance of the connection to a service bureau.
Although it is a very interesting concept, most of the players in the financial industry still have to develop an adequate IT infrastructure in order to get the benefits of this new protocol.
An important role can be played by software vendors that are offering Enterprise Resource Providers or Treasury Management Systems, since they have a strong incentive to differentiate their offer by develop APIs that would connect their solution to the largest possible number of banks.
Who should manage your SWIFT connection, and why should it be FIS?
Every company that wishes to connect to the SWIFT network should ask itself which configuration is the best for them. The main question to consider for a company is if it has the adequate resources to manage and run a SWIFT connection, or if they want to leverage on a service bureau.
Companies that wish to setup and maintain their SWIFT connection should plan the IT resources required to host the SWIFT software, and the personnel that will be dedicated to fulfill all the functional and technical duties required by SWIFT or by the banks.
Because of the effort that is required to setup and maintain a SWIFT connection, a company might decide to outsource those tasks. A SWIFT service bureau can help companies to establish and ensure the availability of the SWIFT network overtime.
Via the Managed Bank Connectivity service, FIS offers its capabilities as one of the largest SWIFT service bureaus in the world, being a key partner for more than 350 groups of banks and corporates, spread in over 35 countries. As part of the Service Level Agreement that FIS has with its clients, service availability is set for a minimum of 99,5%, although the average uptime for 2020 was 99,99%.
Companies that choose to leverage on a service bureau are either those with a very limited staff within the treasury department, or those that have a very complex cash management infrastructure.
The cost of connecting to the SWIFT network via a service bureau can be quite relevant, therefore companies that are evaluating this kind of solution should create a comprehensive and accurate business case that includes both direct and indirect expenses for both alternatives.
Which variables should be considered?
A company should consider several variables when evaluating which is the most adequate connectivity setup.
Whatever process should the company have in place, it should anyway explore a way to consolidate the account statements of all the subsidiary at headquarter level, in order for the holding company to have complete information on the liquidity situation at group level, and to make sure that liquidity is used in the best possible way.
How to choose the best connectivity solution?
If there is one thing that I have learned by talking to corporate treasurers overtime, it is that no treasury is alike, and every treasury has its own peculiarities.
Given the vast array of bank connectivity options, I will define a few examples of treasury infrastructure, and I will pair them to my recommended choice of connectivity.
Case
Recommended solution
Company Alfa
Alfa has two bank accounts, with two English cooperative banks.
Company Beta
The group has relationships with around 30 banks, counting more than 600 bank accounts.
Given the large number of bank relationship, my advice would be to setup a SWIFT connection.
Company Gamma
Payments are quite limited in number.
By having one main bank, Gamma will easily orchestrate a cash pooling from its headquarter, and it will be easy for the group treasurer to control the payments that are performed by the local staff.
The most efficient connectivity scenario is a host-to-host connection (or a connection via API if available), with the main banking partner, while payments from minor bank accounts will be done via the e-banking.
Company Delta
The company needs to offer the widest range of payment options, therefore it needs to have relevant banking relationships in many countries.
Given the very complex cash management setup and the large number of banks involved, it will be essential to have the infrastructure served by a service bureau.
Company Epsilon
The company needs to maintain a wide range of banking relationship due to the complex financing plans in place.
The treasury department employs a single person, and there is no plan for the company to hire more treasury staff.
As highlighted in the box, it would be extremely hard for a single person to handle the requirements coming from SWIFT and the banks, therefore my suggestion is to adopt a Service Bureau
Conclusion – a complex matter requires a complex answer
As I do with most of the complex questions I receive, when asked which is the ideal connectivity setup for my company, my natural answer is: “it depends”.
The aim of this article was to communicate how sophisticated it can be to identify the best possible way to connect a corporate to a bank, or to several banks. My wish is for every treasurer out there to carefully balance all the options, and to include all the relevant items into a specific business case, in order to have a functioning and sustainable infrastructure.
More about the author, who is Luca Crivellari?
Thank you for reading!