Case Study: Transforming CARE’s Treasury with SWIFT and Bank Rationalisation
The continuing treasury transformation project at the CARE
International humanitarian charity has already achieved significant results
since starting up last year – not the least of which is a bank account
rationalisation drive designed to increase efficiency and reporting lines for
donations and the adoption of SWIFT for cross-border payments and connectivity
across emerging markets. Both aspects of the transformation effort, which is
being led by CARE USA as the home for the charity’s treasury, have been
supported by Barclays Bank and the SWIFT Service Bureau (SSB) Expertus.
The aid organisation is present in 84 countries around the world
reaching 83 million people, so it is essential to ensure the reliability and
efficiency of its cross-border payments and banking arrangements, making SWIFT
and Barclays – which is strong in many of the African countries in which CARE
operates – natural partners.
Future plans include an exploration of
the feasibility of using mobile m-banking and payments to make CARE
International’s payroll and accounts payable (A/P) operations more efficient and
relevant to people in emerging markets. Much of Africa, for example, already
uses mobile money schemes such as M-Pesa in Kenya, which allow payments to be
made and monies retrieved via the mobile channel and authorised retail agents.
If this set-up can be harnessed for CARE’s payroll and A/P in developing
countries then the expense and security problems associated with handling cash
can be reduced and more money can be kept for the organisation’s core charitable
purposes. That is for the future, however, and this case study will focus on
what has already been achieved by the treasury transformation project.
Key Project Objectives: Bank Rationalisation and Cash Pooling
has a central treasury function in Atlanta, Georgia in the US, but many cash
related activities had developed organically in the 84 countries where it
operates, with bank relationships often being managed locally. It was recognised
by the central treasury that this approach had limitations in terms of
counterparty, foreign exchange (FX) and liquidity risk – not to mention leaving
cash idle that could be put to work elsewhere. Consequently, a centralisation of
bank relationships and accounts was launched last year and in 2013 the charity
now has several banking partners covering each region, instead of the hundreds
previously in place.
Some regions present more barriers in terms of
pursuing a regional banking strategy than others because the humanitarian work
CARE is involved in is often in the least developed (and least accessible) parts
of the world. It may therefore have several banking partners within just one
country if this helps to get aid to where it is needed, which can be challenging
for the treasury to oversee. As a further example of the problems it encounters
in far-flung corners of the globe, some of the small local banks that it deals
with may not have electronic banking capabilities, making it difficult to
automate payment processes and obtain account information easily. With its
international reach and hundreds of banking members the SWIFT collective can
help negotiate these geographical difficulties.
rationalisation via regional groupings was the first stage effort in the
treasury transformation project, however, before moving to SWIFT, as the need to
get better centralisation and efficiency was paramount. One complication in the
drive to cut the number of banks CARE International deals with was the desire of
some donors to keep accounts open so that they could monitor them for
transparency purposes. To overcome this obstacle, while still satisfying the
crucial needs of donors, the treasury team demonstrated that detailed reporting
was still possible via the new regional banking infrastructure. A policy of no
new bank accounts being allowed to be opened could then safely be enforced and a
Simultaneously, a cash pooling
structure was implemented with key project partner Barclays setting up a header
account in London, UK, which acts as a centralised pool to ensure CARE’s cash
can be ‘sweated’ and invested to achieve the maximum return for its charitable
purposes. The cash pool also helps with the treasury’s efforts to improve
oversight, transparency and reporting.
Moving to SWIFT and Project
Having achieved a streamlined account infrastructure, the CARE
treasury can now integrate bank accounts around the world more easily using its
PeopleSoft enterprise resource planning (ERP) system. The reorganisation is
already delivering enhanced straight-through processing (STP) gains for both
account information and payments or transfer transactions because the next stage
of the project – moving towards SWIFT – has also been enacted.
selected an external SWIFT service bureau, Expertus, and worked closely with
them and its primary banking partner Barclays to handle the on-boarding process
during its move on to the SWIFT platform. The partners looked after all the
legal, technical, testing and logistical processes necessary before the go live
was achieved this year. The experience of the partners was crucial in ensuring a
smooth implementation. CARE is also now a SWIFT member, so is using SWIFT
Corporate Access to achieve its centralisation and integration aims.
advantage of this approach is that it can now leverage a single channel to
access multiple banks and the reporting and financial control requirements of
its donors are more easily met. Efficiency gains have accrued via a reduction in
manual tasking and exception-only account reconciliation. Automated
workflow-driven transaction authorisations are also delivering productivity
The benefits that CARE International is
already getting from rationalising the number of bank accounts it maintains,
centralising its treasury operations and moving towards SWIFT have been
considerable, but it is not done yet. As mentioned previously, the treasury is
exploring the possibility of using the mobile money channel in Africa to aid its
payroll and A/P procedures in future, with Barclays once more providing
technical, IT and consultative support, while the organisation is also going to
enforce a requirement that any future banking partners must be a member of
SWIFT’s Standardised Corporate Environment (SCORE) platform. This is expected to
be a key deciding factor in who CARE decides to bank with in the future.
The treasury transformation project is an on-going process and CARE is
still learning how best to optimise its new structure and supporting SWIFT and
technology architecture. It expects to accrue benefits and to launch
supplementary additions to its working practices for the next year or two as its
reorganisation continues apace.
As an organisation, CARE is proud to
now be able to say that it has an efficient approach to cash and treasury
management that is the equal of many global multinational corporations (MNC).
CARE as a charity has adopted the same approach as an MNC in terms of driving
the maximum use of its available funds via cash pooling and delivering
centralisation and STP to cut operational costs as much as possible, while still
ensuring its financial and counterparty risk procedures are top notch. The
charity is deploying this expertise for charitable ends, but is a firm believer
that by maximising its internal efficiency it can deliver more money and aid to
the frontline fighting poverty around the world.
CARE is committed to achieving
the highest possible standards of accountability, responsibility and
cost-efficiency in the way that it fulfils its humanitarian objectives and
thinks its treasury transformation is a key aspect of this on-going effort to
serve emerging markets and some of the world’s most vulnerable regions in the
best possible manner.