Lloyds streamlines cash management for Virgin Atlantic

Source: Lloyds Banking Group

Lloyds Bank Corporate Markets has developed and implemented a cost saving Host2Host banking solution for Virgin Atlantic, in partnership with ERP (Enterprise Resource Planning) provider Bellin.

First-to-market with the forward thinking cash management product, the company has worked with Virgin Atlantic to create a streamlined system for its UK BACS payments that harmonises and integrates the nine varied ERP systems used by the transatlantic travel company globally.

Implemented within six months, Host2Host operates across Virgin Atlantic's multiple business units and locations and uses a centralised Bellin solution as a Single Payment Gateway to standardise the different file formats created by the company's multiple ERP systems.

Through this Single Payment Gateway, Virgin Atlantic's ERP systems converse natively with Lloyds' transactional banking process using SWIFTNet to provide connectivity.

Triggered by the discontinuation of Virgin Atlantic's existing solution for UK BACS payments and collections, Host2Host has delivered a wide range of benefits for the company, from creating a streamlined payment approval and release process to increasing cash flow visibility for Group Treasury and providing more in-depth transaction and incident reporting. The system's streamlined approach, speed and efficiency have enabled Virgin Atlantic to significantly reduce administrative and operational costs by a predicted £100,000 per annum.

Speaking about the Host2Host solution at a recent seminar hosted by Lloyds Bank Corporate Markets, Edward Collis, Group Treasurer at Virgin Atlantic commented: "The number one thing for us in replacing our legacy BACS system was the need to ensure that whatever solution we selected allowed us to achieve the standardisation of payment processing without duplication of effort and with leveraging our ERP system. "We have now realised a number of significant project benefits as a result of Host2Host. It's saving a huge amount of time in terms of our processes internally and our administrative costs have dropped dramatically as we've been able to move away from a lot of the manual processes that we were doing previously.

"We sly.

"We have had very, very positive feedback from our users since implementation and this is enabling us to drive better business processes in payroll and accounts payable. We have reduced system changes, as we've moved away from a system that we were running in house to a hosted system, and, by implementing alongside it a contingency payment channel, we have also reduced our 'single point of failure'."

On the decision to work in partnership with Lloyds Bank Corporate Markets, Vic Davis, Project Manager at Virgin Atlantic commented: "We evaluated several partners. With Lloyds, we recognised that we had a long, broad and strong existing relationship and that both sides shared the appetite to succeed. Lloyds introduced us to strong partners, VocaLink and SMA and the team were very experienced.

"We equally recognised that the Host2Host solution would give us the robustness and security of SWIFTnet, whilst enabling us to maintain our existing banking structure and being in line with our Single Payment Gateway strategy. It would give enhanced transaction visibility and reporting at an individual item level, something that we hadn't seen before for BACS transactions.

"The development costs were also extremely low. It was more cost effective than upgrading our existing solution and there were lower ongoing costs."

Summarising the Host2Host solution, Mike Rayfield, Senior Product Manager at Lloyds Bank adds: "When we talk about Host2Host, what we're really talking about is eliminating desktop banking. Instead of a desktop BACS software product that has its own screens, log-ins, smart cards, and workflows, if you have an ERP system that is capable of managing your workflow, you can leverage that capability and talk natively from your ERP system into a transactional process.

"After submitting information to an ERP, in a traditional model, all of the data is taken back out of the ERP and re-keyed into banking or BACS software, effectively performing the same action twice. With Host2Host, that doesn't have to happen and duplication of work is eliminated".

Steve Dixie, Director, Cash Management, Lloyds Bank Corporate Markets, added "We are totally committed to helping our clients achieve their operational and efficiency goals, and whilst we have worked with Virgin Atlantic to create a specific solution for their UK BACS requirement, our vision is to make Host2Host broader and deeper by increasing its transactional capabilities to include, for example, SEPA DD, faster payments and other payment mechanisms."

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