A number of the company’s employees had retired abroad and as a gesture of appreciation for years of loyal service the company usually covered the cost of making each monthly transfer. However, the company’s bankers had recently doubled their charges for cross-border payments at short notice and had also widened the spreads they were taking on each foreign exchange conversion. Despite the strong corporate ethos in respect of the sanctity of pension related payments, the increase in transaction fees was adversely affecting the company’s bottom-line and pensioners were experiencing an effective reduction in the value of their pension payments, so Cheryl approached VFX to see if we could help.
Cheryl’s job role involved processing a significant number of monthly annuity payments to over 16 countries to where pensioners had retired. Each of the pensioner’s payee details was stored on the company’s ERP system as part of a series of beneficiary templates, but because of the way these systems were set up, each payment had to be instructed to the bank one by one, usually by Cheryl.
VFX conducted an on-site fact-finding visit to review the challenges that the company now faced and within a few days came up with the following solution;
- A batch upload system that allowed each pension payment instruction to be uploaded in a single file originating from the company’s own ERP system and delivered to VFX using the latest security protocols
- Once uploaded each file could be reviewed and confirmed with every GBP payment being converted into the individual pensioners preferred currency with a corresponding exchange rate for each transaction
- Exchange rates used were representative of the Interbank market with much tighter (and pre-agreed) spreads even in exotic currencies, not just the majors
- At the press of a button all the payments could be released for processing by VFX under email advice to each pensioner letting them know exactly how much to expect and when.
- The company was able to continue to respect the sanctity of pensions related payments and continue to cover the cost of disbursement as transaction costs were significantly reduced particularly in the SEPA region
- The time taken to administrate this function was drastically reduced, so much so that Cheryl has been promoted to take on additional responsibilities with the company
- FX rates were improved so whilst pensioners did not see their pension payment increase, they experienced an up-lift in the value of the payment after conversion due to the superior exchange rates applied
- Most pension payments arrive faster than had been the case under the previous arrangement and each pensioner is provided with an email confirmation that their pension payment had been made.