7th Feb 2022

How to effectively manage risk in Global Banking Operations

When you’re conducting global banking operations, risk management is at the top of the agenda.

It would be naïve to brush aside the inherent risks associated with transferring large sums of money around the world.

True, there’s likely no balaclava-clad cyber-criminal eager to steal data and intercept your payments, but that doesn’t mean that risk isn’t present.

In fact, for many corporates, Covid-19 has revealed the importance of preparing for the unexpected; disaster recovery, human error, unexpected payments, and a lack of cash visibility have emerged at the forefront of treasury processes.

That doesn’t mean that risk management is simple, though.

In the second instalment of our Finance Transformation Unlocked series, we teamed with IFS specialists Muzulu to discuss the problems associated with overcoming banking operation risk – and, crucially, how to overcome it.

We’ve compiled the key takeaways from Muzulu and AccessPay – read on to learn how to see, control, and optimise your cash and leave risk behind for good.


Transmission Risk in Banking Operations

For Hamish Johnson and Dharam Atwal – Managing Director and Senior ERP Consultant at Muzulu respectively – the largest consideration when it comes to banking operations is transmission risk.

Muzulu understand well the intricacies of an ERP system, as well as the importance of connecting them to your banks. However, in our session, they were equally keen to emphasise the possibility of payment files being updated or altered along their typically-long journey.

This is where the prevalence of human error is revealed, too, as those who alter payments are often well-meaning but misinformed. Not only this, but something as simple as misplacing a decimal point or typing an additional zero upon the original transmission of the payment file can be enough to send your business into temporary shortfall.

The transmission of payments from the ERP suite, therefore, must be carefully controlled, as safety is the main priority. Thankfully, AccessPay’s Cash Management solution provides total visibility of your working capital – no matter the number of subsidiaries or banks.

With a concise and conclusive overview of your payables and receivables, corporates can rest easy knowing that, whether they have a dedicated treasury team or not, the veil previously covering transmitted files has been drawn.


Risk Management: The Need for Speed

Automation is increasingly present in the workplace, no matter your sector. In fact, according to the World Economic Forum, over 80% of business leaders say they are speeding up work process automation.

As you’re likely aware, the world of payments is no different.

While the adoption of payment automation is increasing drastically, the speed and reactiveness that some companies hope to automate can create its own issues.

AccessPay are dedicated to implementation in 12 weeks or less – but occasionally businesses seek out automation on incredibly short notice, hoping to process a pesky-but-sizeable file at breakneck speed.

As pointed out by the minds at Muzulu, this can create a risk management nightmare; upon learning the impossibilities of full automation on a whim, the business in question may turn to manual workarounds – once more introducing risk through rushed processes.

With fully automated Payment and Cash Management solutions, you can happily wave goodbye to those stressful short-notice payments, allowing for a transparent overview of your cash flow.

With the ability to slow down comes not only a lessened need for risk management, but the ability to pore over data with the necessary rigour and effectively forecast.

Muzulu Berate Formatting Faff

A third notable obstacle to risk management is the wide array of banking file formats available, each with their own regulations and legalities.

Given that banks put their own requirements on domestic formats especially, Hamish notes the challenges this can provide.

“Part of this puzzle – certainly in Muzulu’s experience – is formats.

“Here in the UK, there’s Bacs – but is Bacs different to Faster Payments (in terms of risk)? Different to Chaps? Different to anything else?

“Then you go international and talk about the ISO 20022 format. There is a whole multitude of different formats available – which one should we use?”

There’s a need, then, to mitigate the influence of the various file formats and further reduce banking operation risk.

Thankfully, AccessPay’s solution is 100% file agnostic. By automating the processing of any payment file type, risk management becomes a significantly simpler task.


AccessPay’s Take on Risk Management

This episode of Finance Transformation Unlocked also featured Parvez Patel, Product Manager at AccessPay.

Coming from a storied treasury background, Parvez understands well the intricacies of day-to-day global banking operation processes – as well as the associated risks.

He notes that for many businesses, problems typically arise during notable periods of growth, such as mergers and acquisitions.

Not only are there the expected attempts to bridge disparate systems and work processes such as ERPs and banks, but every facet of a company’s banking operations increases in volume.

“Your banking relationships increase as well”, Parvez elaborates, “especially if your organisation has acquired a business that’s multinational.

“Straight away, the people that work in these central finance and group finance roles – even the shared service functions that serve these wider departments – have to absorb these volumes of data, while at the same time maintaining their reporting standards and deadlines.”

No easy feat; exacerbated by attempted quick fixes and workarounds.

“It’s in these situations that you find very agile ways of working in these departments, in terms of creating workarounds to accommodate these volumes.

“But these workarounds aren’t necessarily process-improvement workarounds, but more ‘let’s just get stuff over the line’ workarounds.”

Echoing Hamish and Dharam’s points, Parvez points to the manual nature of these attempted processes being where banking risk enters the conversation.

Human error and the manipulation of data become commonplace – eventualities that, as we’ve already alluded to, aren’t guaranteed.

AccessPay’s solution is predicated on security.

With our bespoke Cash Management solution, corporates can reap the benefits of increased cash visibility, allowing for the avoidance of shortfall and needless charges that can threaten global banking operations.

Not only this, but you can easily view expected payments, allowing you to identify unexpected or devious activity across your subsidiaries.

Our cloud-based, automated nature further eliminates the risk of human error, and the vast amounts of time your treasury team will find themselves with ensures the avoidance of faulty manual workarounds.

To find out more about our solution, book a demo here, or watch the full episode of Finance Transformation Unlocked below.



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