SunGard recently conducted a study on payment and bank connectivity practices around the globe. The study found that fraud is a top driver for payments centralisation projects. Rather worryingly, we also found that many organisations have still not put the necessary processes in place protect themselves from this burden and may still have some key areas of vulnerability. Fraud has always been on the list of drivers that can lead towards a Payments project, but it has been steadily been rising to the top. It’s hard to ignore the prevalence of compliance requirements hitting the Financial Services industry, as well as a heightened sensitivity to fraud. It’s not as if fraud didn’t exist before...

Many companies surveyed are stuck in intricate webs of banking relationships -- 25% of companies use more than 10 cash management banks and 23% of those companies maintain more than 1,000 bank accounts. We often see companies maintaining multiple local currency accounts across the globe to facilitate subsidiary transactions. However, those accounts usually contain marginal fund balances that could be more appropriately invested and this cash is often not visible to the Treasury team. Our respondents did not indicate that bank account consolidation was a main driver for centralisation projects; but those companies that had undergone centralization projects found the simplification of banking relationships as an added benefit. 

The complexity surrounding most corporate payment processes and systems results in concerns / risks related to payment fraud. While additional ERP systems or banking relationship structures may be necessary for growth, this can also add to that complexity, creating further vulnerabilities. We found that only 20% of respondents to the survey had implemented a standardised global payments workflow across all entities -- a key practice in fraud prevention.  If you want to really take control over those in your organization that are making and approving payments being sent to your banks, you need to centralize that control. Payment Factory Software is part of that solution.

A broad trend emerged from our global study -- organisations are actively looking to combat exposure to fraud, to strengthen governance and reduce costs. To do so, they are increasing controls around payments by standardising and centralizing that process. If your company has not yet undertaken a review of your payments processes and structures, you can uncover those areas of vulnerability, take action and protect your organization.