Digicel's treasury team was faced with a manual cash concentration process that involved the daily challenge of accessing multiple electronic banking platforms, then downloading each account statement, and finally inputting the funds transfers from each bank by hand. This tedious process also required securing internal approval for each transaction, which often proved to be extremely time consuming and ultimately delayed processing. The entire process required multiple professionals' involvement, from start to finish, to be completed.
"In addition to being cumbersome, our existing cash concentration process was prone to human error," explained Alvaro Torres, Group Treasury Manager for Digicel. "We often had transactions being rejected because the wrong amounts were input. We also found that we were keeping idle cash in these accounts, which, of course, had negative working capital implications."
In order to modernize its treasury function, Digicel's treasury team implemented a multi-phase initiative focused on visibility, automated cash concentration, and bank connectivity. Treasury turned to Citi to put in place a multi-bank target balance solution (MBTBA). The MBTBA solution automates the concentration of balances held with third-party banks into a single header account at Citi, providing visibility and control across banking relationships. The Liquidity Manager application of the CitiDirect BE® online banking portal was instrumental in delivering account accessibility.
The Citi solution allows Digicel to continue collecting from its customers through multiple banks. These third-party banks then send daily MT940s to Citi to provide visibility into Digicel's end-of-day balances. Citi compares those balances with the company's parameters and calculates amounts to be swept on a daily or weekly basis, reducing operational risk.
"The implementation of Citi's MBTBA solution went extremely smoothly," added Alvaro Torres, Group Treasury Manager. "From testing to production, communication with the bank was consistent and thorough, which was key to the success of this highly efficient initiative."
Citi's MBTBA solution has been a resounding success for Digicel. By automating the cash concentration process, the treasury team has eliminated manual intervention. This has created a more secure, more efficient and more cost-effective process for the company.
"The visibility delivered by this Citi solution enables our treasury organization to make more accurate and informed decisions," concluded Alvaro Torres, Group Treasury Manager. "Instead of accessing multiple banking platforms, and manually inputting funds transfers, now with MBTBA the complete process is automated and digital. This allows us to avoid spending so much time and so many resources on manual tasks, which frees up personnel for strategic analysis and more effective decision-making."
Key benefits of Citi's MBTBA solution for Digicel include: