Worldpay’s Fast-Track to Technology Excellence
By Chris McLoughlin, Treasury Manager, Worldpay
There is often discussion about how technology can have a transformative impact on treasury, but in many cases, this simply refers to managing existing processes more efficiently or effectively. In Worldpay’s case, with a relatively new treasury function that has had to deal with enormous change within both the business and the environment in which it operates, the effect truly has been transformational. Not only has the treasury team been able to manage the growing scale and complexity of the organisation, but it also continues to leverage technology to add value to the business in new ways.
When Worldpay was spun off from RBS in 2010, we did not have a formal treasury function, and treasury activities were distributed across other roles. In 2011-2012, we set up a defined treasury team of four people, which quickly extended to include bank relationship and account management in 2012. Since then, we have continued to expand the scope and depth of our activities, providing insights and support to the business and improving the skills and business knowledge within the team to meet ongoing business challenges. For example, since becoming an independent business, we have embarked on a series of M&A activities, together with an IPO in 2015, as well as new subsidiaries acquiring licences in the Netherlands, Japan, Hong Kong, Singapore and Australia. These have resulted in a transformation from two main operating legal entities with informal treasury activities to a highly structured, multi-entity, global business with complex treasury requirements. As a result, our team now comprises 17 people, and we are heavily focused on optimising processes and positioning our activities to support further business change and expansion.
A catalyst for technology change
Although there have been a number of milestone events in the development of the Worldpay treasury function, the trigger for our technology transformation was in 2014 with the new EU rules on interchange, which necessitated setting up a new entity in Amsterdam and the division of our merchant book. We already had 600 bank accounts in 14 currencies, so the duplication of processes and reporting, which were mostly based on spreadsheets, created significant additional scale and complexity. Therefore, we needed to find a more integrated approach to managing treasury across multiple entities.
Our treasurer had experience of treasury management systems (TMS) from a previous role, so we evaluated the technology options that were available. We ultimately selected Kyriba for a variety of reasons. With relationships with 50 -60 large banks, and a variety of smaller ones, maintaining bank systems was extremely laborious and time-consuming. With Kyriba, this process was simplified, and we had a single source of data with a high degree of confidence and auditability. The system was highly configurable, allowing us to set up the system to meet our initial and ongoing requirements, and to achieve a significant level of process automation. We also recognised the excellent support that the Kyriba team was able to offer both during and beyond the implementation.
We have automated a large number of treasury processes and have daily access to accurate and complete information across our business. As all system actions are fully auditable, our treasury team, senior management, internal and external auditors have a high degree of confidence in our data and processes, and therefore the quality of decision-making. We are also able to answer queries very quickly, which saves significant time and further enhances business and senior management confidence in treasury.
The benefits of implementing Kyriba extend significantly beyond meeting our initial process and control requirements, however. Firstly, there have also been demonstrable cost and control benefits, such as alerting operational teams to overdrafts. Secondly, by implementing a scalable, flexible system, we are in a far better position to keep pace with regulatory, market and internal changes without the need to supplement existing resources. For example, since 2014, we have extended our use of Kyriba across another six entities for merchant cash management and forecasting, involving over 1,800 bank accounts with over 100 banks in 50 countries, including relationships with both financial institutions and alternative payment providers. As a heavily regulated company, pooling through our banks is complex, so we use Kyriba to achieve visibility and control over our accounts and manage our cash balances on a zero balancing basis.
We are also able to leverage the system to add value to the business in new ways. Our internal cash flow forecasting (as opposed to merchant cash flows) is one such example which we implemented this year. We are now able to forecast cash flow across the group, spanning more than 40 separate entities. As a result of better completeness, timeliness and accuracy, we are able to make better, quicker liquidity and risk decisions, reduce our cash buffers and anticipate operational or strategic cash flow issues in advance.