From the November 2010 issue of Treasury & Risk magazine

Bronze AHA Winner in Liquidity Management

Managing All FX Transactions In House: AT&T

By bringing the outsourced servicing of its Consolidated State Service in house, AT&T eliminated a significant cost and improved customer service. The project reduced foreign currency (FX) transactions from thousands to a couple dozen a month, says Tom Clemens, director of financial analysis. The solution uses a single U.K. international bank account number (IBAN) to consolidate FX payments, and a pooling structure to hold the currencies. A zero-balance account seamlessly drains the notional U.S. dollar pool daily from London to New York, Clemens explains.

The CSS has long been popular with customers, who can pay for global telecommunication services with a single payment in the currency of their choice. The funds are received into the IBAN account and redirected to subaccounts denominated in 12 currencies. The subaccounts are notionally pooled, with the equivalent U.S. dollar amount swept into a concentration account to be used by treasury to pay down commercial paper or for other corporate purposes. Once a month, AT&T uses funds from the subaccounts to pay its local subsidiaries in their respective operating currencies.


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