07 June 2019

Impact of Global Centralisation: Streamlined management of payments

As a FTSE 100 constituent, our Client promotes greater financial health and consumer opportunity by helping its clients understand, manage and protect their personal information. Their services provides millions of individuals with secure, online access to their credit history and score, empowering them to manage and improve their financial status, shielding themselves against fraud and identity theft.

Our Client established a Global Shared Services Centre (GSSC) in Malaysia in 2011. The GSSC now manages end-to-end transactional processes of banking activities, supporting its Asia-Pacific and EMEA regions with pipeline plans to support its Latin American-based operations.

The Nation’s Silicon Valley

The selection of Malaysia as our Client’s location to centralise its operations is attributed to its ability to support both a sustainable and low-cost structure. The multifactorial decision was made on the foundations of encouraging advisory by the Malaysia Digital Economy Corporation (MDEC) – Malaysia’s lead digital economy driver. In addition, critical factors included: our Client’s established Kuala Lumpur-based development centres, and a readily available skilled workforce which elevated the confidence of our Client in realizing its GSSC ambitions in Malaysia. This initiative, a tangible extension to our Client’s expanding ASEAN footprint, was a continuation of the build-out and consolidation of its GSSC infrastructure. The combination of factors including the need for operational standardisation and room for scalability addressed our Client’s concerns. In addition, Malaysia, a specialist centre for the know-how of the setup of GSSCs with well-equipped technology and infrastructure, met our Client’s needs. These collective elements culminated in the strategic establishment of its GSSC in Cyberjaya – Malaysia’s Multimedia Super Corridor, the nation’s aspiring Silicon Valley.

Besides being at the heart of the MSC, other considerations when selecting Cyberjaya included the relatively economical floor space to real estate price ratio when compared with the central business district of Kuala Lumpur.

End in Mind Objectives

As a business services provider of repute, our client seeks to establish itself as a centralised Centre of Excellence (CoE) in support of its global processing activities, achieving a high-level of efficiency. This includes the increase governance and control via a streamlined Standard Operating Procedure (SOP). Retention of growing talent by maximizing the use of available resources with the scalability of the business is a strategic initiative our Client employs. The leveraging on industrial expertise ensures our Client’s position at the forefront of the industry by being first movers. These collective efforts induces the promotion of scalability and flexibility in an effort to maximise its efficiency as a function of time and cost.

Challenge Managing Global Operations

Our Client’s primary concern was the streamlining of its payments process. Their far-reaching operations meant it required a financial services provider matching its global footprint. Consequently, our Client consulted its longstanding UK-based financial services provider – HSBC. The Global Liquidity and Cash Management Team at HSBC was quick in addressing the needs of our Client with the proposal of a centralised payments process across its extensive global network in a single location – Malaysia. As its core bank, it was a privilege for HSBC to tailor and execute a fit-for-purpose solution. The direct connectivity will lead to the efficient and streamlined payments process through a core financial institution.

The Solution

A direct link between our Client’s ERP and HSBC’s back-end system was initiated through the host-to-host connectivity for straight-through processing of payment instructions, feeding back the electronic bank statement1 and file2 status activity report.

This designed structure lends creativity3 to our Client’s solutions, product innovation, and flexibility; enabling the tapping of established infrastructure between our Client’s operations in the UK and HSBC.  The unique complexities provided HSBC Malaysia the opportunity to collaborate in a global and regional capacity, capitalising on collective expertise4 with a sustainable precision-led focus for an innovative solution to meet our Client’s needs. This coverage extends to its Asia-Pacific and EMEA operations. Streamlining is required for the complexities of infrastructure, setup and cross-border operations between its Center of Excellence (CoE) team, HSBCnet profile, and host-to-host connectivity with its operations in Malaysia, Singapore and the UK. 

A Transformative Success

HSBC’s astute solution along with creative product innovation translated into tangible time and cost savings, supplementing the augmented governance in the implementation of a single host-to-host connectivity, linking HSBC and our Client’s global operations. The extensive migration process involved various global systems. HSBC’s proven implementation methodology5 effectively managed the seamless transition of our FTSE 100 Client. 

Success Well-deserved

HSBC satisfactorily delivered all our Client objectives: the centralisation of our Client’s global operations resulted in significant cost reduction, increased efficiency and improved governance.

The implementation of H2H for the APAC region has brought a lot of benefits to the team and the general AP operations. Apart from the time savings, there`s the additional level of security we have from a Controls and Compliance point of view. With the file transmitting directly from Oracle to HSBC, risk of mishaps at this stage of the process is removed and the need for approvers to log into the bank to review and approve the payments is no longer necessary as well. Looking at the future, with H2H in place, we can now transition to a more end to end automated (and reliable) payments process.

Global AP Manager

From a user point of view, we see the effectiveness in terms of time spent by the team to perform the payment from start until payment approval. Host to host connectivity has eliminated manual intervention through payment file upload into HSBC.Net payment platform. Additionally, the time taken to prepare each payment has gotten shorter, more effective and straightforward. The time we saved has been put to good use in other areas (control and compliance, process improvement…).

AP APAC Team Lead

Sources

1 The electronic statement is channeled via a feedback loop. Moreover, this provides an audit trail for each file submission activity – file status activity report.
2 The file refers to version 3 of the XML format; the industry standard supported by all countries, substantiated with its optimum format.
3 This exemplifies HSBC’s prudent capabilities in the application of its intercontinental products. The premise rides on the existing infrastructure by assimilating cross-border products; extending the coverage with a mapped client footprint. This case study, showcased HSBC Connect in the UK and HSBCnet in Singapore.
4 Intercontinental and cross-product expertise in HSBC’s markets in the UK, Singapore and Malaysia.
5 HSBC employs a project governance methodology in its client engagements. Specific to this unique case, a dedicated team was assigned with the cooperation between our client and the Bank, enabling the joint cohesive execution. The structured project governance included the implementation manager, scheduled client meetings ensuring checks and balances were on par with lead times, and the addressing of concerns and challenges. Four critical areas of governance include: documentation, discussions on file format and development, testing and live simulation. Finally, an in-built transition management phase was integrated providing our client the confidence of use of the newly implemented system.

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