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. In Worldpay’s case, with a relatively new treasury function that has had to deal with enormous change both within 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.
Building a future-proof treasury organisation
When Worldpay was spun off from RBS in 2010, the company did not have a formal treasury function, and treasury activities were distributed across other roles. In 2011-12, Worldpay set up a defined treasury team of four people, which quickly extended to include bank relationship and account management. Since then, the scope and depth of activities has greatly expanded, 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, Worldpay has embarked on a series of M&A activities, together with an IPO in 2015, and created new subsidiaries which acquired 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, the team is now comprised of 17 people, and is 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 its 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 its merchant book. Worldpay 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, it needed a more integrated approach to managing treasury across multiple entities.
Worldpay’s treasurer had experience with treasury management systems (TMS) from a previous role, so they evaluated the technology options that were available. The company 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 became a single source of data with a high degree of confidence and auditability. The system was highly configurable, helping meet initial and ongoing requirements, as well as achieving a significant level of process automation. Worldpay also recognised the excellent support that the Kyriba team was able to offer both during and beyond the implementation.
"Since migrating our APAC entity forecasting process onto Kyriba in Q3 of 2017, we have calculated a saving of 5 hours per day whilst automating the required payments."
Treasury Manager, Worldpay
Worldpay has automated a large number of treasury processes and has daily access to accurate and complete information across its business.
“The team is also able to answer queries very quickly, which saves significant time and further enhances business and senior management confidence in treasury,” says Treasury Manager Chris McLoughlin.
The benefits of implementing Kyriba extend significantly beyond meeting initial process and control requirements, however. Firstly, there have been demonstrable cost and control benefits, such as alerting operational teams to overdrafts. Secondly, by implementing a scalable, flexible system, the company is 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, Kyriba usage has extended across another six entities for merchant cash management and forecasting, involving over 1,800 bank accounts with more than 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."
Treasury Manager, Worldpay
The company is also able to leverage the system to add value to the business in new ways. Internal cash flow forecasting (as opposed to merchant cash flows) is one such example which was implemented this year. The treasury team is now able to forecast cash flow across the group, spanning more than 40 separate entities. As a result of better completeness, timeliness and accuracy, executives can make greater, quicker liquidity and risk decisions, reduce cash buffers and anticipate operational or strategic cash flow issues in advance.
Given the configurability of the system, it was essential to spend time during the implementation setting up processes, rules and controls carefully in order to achieve the expected level of process automation and reporting sophistication. In addition, the time spent testing the system using a sandbox version was valuable, both in refining processes and ensuring that Worldpay staff were familiar and comfortable with the new system.
With Kyriba, Worldpay’s treasury team has been able to become far more proactive rather than reactive, adding value to business operations by leveraging the solution’s sophisticated insight and analytics. Although Worldpay is already using a broad range of functionality offered by the system, there is still a great deal of untapped potential, particularly for a relatively young treasury department. For example, while currently managing intercompany accounting manually, it is considering migrating this to Kyriba. Similarly, it may also use Kyriba to manage debt structures and regular payments. Worldpay is currently still going through the merger process with Vantiv, so the new treasury organisation is not yet clear. However, given the benefits it has derived from using Kyriba, and the growing complexity of its business, Kyriba is likely to remain a fundamental part of its treasury technology infrastructure in the future.
Worldpay is a global leader in payments processing technology and solutions that enable merchants to accept a vast array of payment types across multiple channels, almost anywhere in the world. Since Worldpay became independent of RBS in 2010, it has made multiple acquisitions and was listed on the London Stock Exchange as a member of the FTSE-100 in 2015. In August 2017, Vantiv announced the acquisition of Worldpay for $10.4 billion. The resulting company will be the biggest payments company in the world.