DEBT TREASURY ANALYTICS ABOUT INSIGHTS CONTACT MARKET INTELLIGENCE “WE HAD AN IMMEDIATE RETURN ON INVESTMENT ON OUR BANK FEE MONITORING SOFTWARE”, FRÉDÉRIC CAPRARO – RTL GROUP 02/11/2021 NEWS Bank fee analysis continues to be an obstacle for treasurers. How can global companies leverage technological innovations to improve visibility of bank charges? Wondering how to use technology to make bank fee analysis more efficient? Looking for a process to follow to analyze fees, spot billing violations, compare banks and improve visibility? To explore how to efficiently control bank charges with treasury software, Redbridge interviews Frédéric Capraro. Frédéric is the senior project manager for the treasury department at RTL Group, an international media company based in Luxembourg. He also manages the SWIFT Customer Security Program and participates in implementing organized management of banking powers to combat fraud. Frédéric shares how HawkeyeBSB helps his organization visualize, control and reduce bank fees on a daily basis. – Can you give us a brief overview of RTL Group and its treasury organisation? – Frédéric Capraro: RTL Group is a leader across broadcast, content, and digital, and operates 68 television channels, 10 streaming platforms, and 31 radio stations. RTL Group also produces content throughout the world and owns digital video networks. In 2020, its turnover was around 6 billion euros and adjusted EBITA around 850 million euros. RTL Group’s treasury organization is decentralized. Although cash is raised at the group level in Luxembourg, each business unit in each country is autonomous and manages its banking relationships according to its needs, in line with group policies. Our bank relationships were mainly developed between 2010 and 2018 when we carried out a country-by-country RFP to select new banking partners. Historically, and for reasons related to our business, we use one or two banking relationships in each country that we operate in. Our operations go beyond Europe as we have a presence in the United States, Australia and Asia. In total, we have 13 cash management banks, and we communicate with them for our payments and the receipt of our account statements through SWIFT. Some of our subsidiaries, such as Fremantle, are highly active in account opening and closing, as each production/season is independent and has a limited timeframe. Groupe M6 in France, a publicly listed company in which RTL Group owns a 48% stake, has an entirely independent treasury. – What prompted RTL to modernize the control of its bank charges? – From a treasurer’s perspective, bank fee analysis is a difficult task. Banks use different pricing structures, and statements, generally sent by mail and less often electronically, may be pages and pages long. RTL Group has around 800 bank accounts, and the treasury team opens and closes about 100 accounts each year based on the needs of RTL’s productions. A thorough bank account analysis is a lot of work for our seven-person cash management team. We needed to further improve our visibility of bank charges. Especially in terms of our speed to access relevant data and automating the collection/analysis process. Typically, after the rollout of a new bank that was selected by RFP, we would pick a few accounts at random to check whether the negotiated fees were being correctly applied. Once these checks were carried out after the RFP, there would be no close follow-up over time. We assumed that the banks were organized enough to bill us appropriately. However, we had some doubts about the banks’ ability to charge us correctly. Looking at the cash pooling fee structure of one of our partners, we found that cash pooling fees were still being applied to accounts that our group was no longer responsible for following the sale of 15 subsidiaries. The billing violation amounted to around 20,000 euros per year. – How did you learn about our Redbridge Analytics fintech and its bank fee monitoring software, HawkeyeBSB? – I had the opportunity to meet the Redbridge Analytics team at EuroFinance a couple of years ago. I knew that there was a modern solution to control bank charges. Compared to other solutions on the market, HawkeyeBSB already had many BSB file formats in its library and appeared to be a plug-and-play expert solution. – How has HawkeyeBSB changed your view of your cash management services and its associated cost? What does the software bring you? – Thanks to HawkeyeBSB, we were able to identify double billing and eliminate services that we did not use or were not essential for us. These savings have essentially covered the costs of setting up the tool. We also managed to harmonize the prices applied to each new account by country, and this enables us to benefit from the most favorable negotiated conditions to this day. By integrating HawkeyeBSB, we have made material progress in digitizing our treasury processes, starting with bank fee monitoring. – What savings have been made because of this modernization project? – We ended our banking services that were either billed twice or not used. The return on investment of the solution was immediate. – How did you implement the tool and how do you use HawkeyeBSB on a daily basis? – The software deployment proved to be quite simple. It was a question of setting up an SFTP connection with an encrypted file exchange — that’s all there was to it. The greatest challenge was obtaining the fee statements from our banks. This required several exchanges with the banks to set up the documentation and receive the files via SWIFT. The most tedious part of the process was getting these BSB files, whether it was a camt.086, EDI or another format. – How do you use HawkeyeBSB on a daily basis? – We use the tool for information purposes only. HawkeyeBSB gives us visibility about the fees we pay with a level of detail that ERPs are not able to provide. It’s a real plus. HawkeyeBSB helps us better understand the banking services we use and gives us food for thought on how to manage our payments. When we see that the fees we pay are higher in some countries than in others, we consider the possibility of migrating these payments to our payment service center by organizing POBOs, for example. We made our first savings after the software was deployed in March 2020. We have not yet provided our subsidiaries with access to the software to carry out their monitoring independently, but the tool allows us to do so if we want. We follow up with our banks every three months. To smooth out the process, we ultimately decided to ask for fee retrocessions where double invoicing occurred. The point of view of our expert, Gaelle Parquic, associate director at Redbridge Analytics. Immediately after the implementation of HawkeyeBSB, there is always some analysis to be done to make savings. Receiving the information and being able to aggregate it is one thing, but you also need to take time to find out about your banking services and related costs so you can do one big cleanup. In the beginning, our customers tend to use HawkeyeBSB almost every day. As time goes by, when they’ve come to grips with and mastered their major banking services items, the customer may decide, depending on their organization, to follow up monthly, quarterly or even half-yearly. This is not a problem as long as the tool feeds itself every month, independently of any intervention. The vast majority of banks are capable of transmitting dematerialized expense statements. But all too often, account managers are unaware of this. The information is rarely relayed to local branches. In addition, delays in receiving the first BSB file are lengthened by the documentation that needs to be completed to set up the new service, as well as the channel for transmitting the files. For example, it is still the customer who has to list their accounts to activate the service, even though the bank obviously has the list of accounts in its systems! In an ideal world — hopefully not too far away — bank statements will be made available automatically. Lastly, is it free? It depends. French banks charge for dematerialized bank statements. American banks do not, or charge a modest price, but they do charge a fee for transmitting the statements. Sometimes they forget to charge these transmission fees, which shows that it is not always bad faith when banks make mistakes! Portrait Frédéric Capraro is in charge of structuring projects for RTL Group’s treasury department. He is the guarantor of compliance and best practices, for example when he manages the Swift Customer Security Program designed to minimize the risk of cyber-fraud, or when he participates in the implementation of organized management of banking powers to combat fraud. It is now focusing on replacing RTL Group’s banking communication tool and setting up a new payment center. 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