The MoFA is responsible for coordinating and implementing foreign policy, trade and development. The North American country is represented in a large number of countries and in many international organizations, and this is reflected in an extensive network of High Commissions, Embassies, Permanent Representations, Consulates and Trade Missions. These missions represent the country and therefore all branches of its government.
Each mission had its own bank account in local currency. Due to operational requirements, additional accounts in other currencies were also required for some of the missions. This resulted in inefficiencies in operations and increased costs. In or around 2013, MoFA introduced a Shared Service Center (SSC) concept for streamlining the finance and banking activities of their missions, globally. Each SSC was mandated to conduct remotely accounting/ banking tasks on behalf of the missions within its area of responsibility. MoFA required a banking partner with global reach and ability to deliver consistent and global solutions, enabling them to realize objectives of bank rationalization, standardized bank connectivity, a comprehensive service model, and reduced costs of transactional banking processes.
Citi won the mandate from MoFA to be its global banking partner for the implementation of the SSC banking model. Citi offered a Centralized Cash Management (CCM) suite of solutions to the client that seamlessly integrated with the client’s ERP system. This included payment consolidation and reporting via CitiDirect® BE, and through the host-to-host solution, CitiConnect®. However, recognizing the complexity of the delivery model and the number of countries involved, Citi and MoFA agreed upon a phased approach to account opening and technical implementation on a regional basis.
The first phase of the project focused on implementation of the CCM solution in 15 APAC countries, which began in 2013 and was fully operational by 2015. Second phase of the project saw implementation in 20 countries in EMEA, which began in 2016 and was completed in early 2017. Third and final phase of the project is currently ongoing with implementation in 18 countries in NAM/LATAM region within scope. It is expected that this phase of the implementation will be completed by June 2020.
Through its relationship with Citi, MoFA was able to optimize its working capital management and re-engineer its business management processes, resulting in meaningful cost savings through a rationalized banking infrastructure and associated operational efficiency gains.
By selecting Citi as it global banking partner, MoFA was able to leverage Citi’s end-toend solution expertise from payment initiation to transaction-level reporting. By using Citi’s Straight Through Processing (STP) and Straight Through Reconciliation (STR) capabilities, MoFA was able to ensure that efficiencies were driven through all payment and reconciliation support processes, resulting in fewer “query resolution” items. In addition, by consolidating the payments and reporting processes through CitiDirect BE and CitiConnect, MoFA was able to achieve material cost savings and efficiency gains for its missions.