A number of the company’s employees had retired abroad, and as a gesture of appreciation for years of loyal service, the company traditionally covered the cost of each monthly pension transfer. However, the company’s bankers had recently doubled their charges for cross-border payments and increased the spreads they were taking on foreign exchange conversions. Despite the strong corporate ethos around the sanctity of pension payments, the rise in transaction fees was negatively impacting the company’s bottom line, and pensioners were experiencing a reduction in the value of their payments. Cheryl approached VFX to see if we could help.
Cheryl’s role involved processing a significant number of monthly annuity payments to pensioners across 16 countries. The payee details for each pensioner were stored in the company’s ERP system as beneficiary templates, but due to the system’s setup, each payment had to be instructed to the bank individually, usually by Cheryl.
VFX conducted an on-site fact-finding visit to assess the challenges faced by the company and, within days, delivered the following solution:
- A batch upload system that allowed pension payment instructions to be uploaded as a single file from the company’s ERP system, delivered to VFX via secure protocols.
- Once uploaded, each file could be reviewed and confirmed, with each GBP payment converted into the pensioner’s preferred currency, using a corresponding exchange rate for each transaction.
- The exchange rates used were based on the interbank market, with much tighter (and pre-agreed) spreads, even for exotic currencies, not just the majors.
- With a single click, all payments could be released for processing by VFX, accompanied by an email to each pensioner, notifying them of the amount they could expect and the payment date.
- The company was able to maintain its commitment to pension payments, covering the cost of disbursement while reducing transaction costs, particularly in the SEPA region.
- The time taken to process payments was drastically reduced, enabling Cheryl to take on additional responsibilities and ultimately leading to her promotion.
- Exchange rates improved, meaning that while pensioners didn’t see their payments increase, they did benefit from a higher value due to superior exchange rates applied at conversion.
- Most pension payments now arrive faster than before, and each pensioner receives an email confirming that their payment has been made.
