Standards are a good thing for treasury departments bent on automation and efficiency, but a cascade of new standards and drawn-out migrations by various players has left treasuries in a Tower of Babel. A bank transmission to or from an ERP system or treasury workstation may no longer make sense. The more banks and internal systems involved, the worse the cacophony gets, requiring one emergency translation patch after another. Now the treasury at Toyota Financial Services (TFS) in Torrance, Calif., has solved this problem by building a solution around SWIFT Alliance Integrator for version 7 of SWIFT.
“We were constantly wrestling with managing multiple banking relationships, connections and messaging formats,” says Mario Delfin, national manager of enterprise cash management and treasury systems at TFS. “Our core business lines could not take advantage of the greater reliability, security and convenience of new banking products if the formats didn’t match.”
TFS, an automotive finance company with $91 billion in managed assets, is transaction-intensive and needs to be highly efficient in its bank communication. To that end, it joined SWIFT in 2006, hosting its own SWIFT Alliance infrastructure, and began using SWIFT messages, SWIFT standards and a FileAct interface extensively. TFS currently uses SWIFT with 13 banks in the U.S., Canada and Europe. A SWIFT data transformation tool was a good fit for what was already a SWIFT shop.
Here’s how it works. On average, TFS processes more than 10,000 wire transfers a year, which come out of Wallstreet Suite, its treasury management system, and go into the Integrator system for format validation of MT101 and MT103 messages, ensuring the wire transfers are ready for processing at its banks.
While the core product, the Integrator, is packaged by SWIFT, TFS didn’t just plug in a solution. It started by forming a permanent treasury systems and projects group that includes treasury, cash management and IT experts. That team put together an integrated solution and chose the Alliance Integrator as a key software component.
“We essentially created a new ‘product’ for our internal customers called Cash Management Integration Services (CMIS) that centralized the data transformation of bank messages in treasury and shielded the rest of the company from the burden of updating legacy host systems to keep up with the evolving bank messaging landscape,” Delfin says.