Case study: creating top-notch SWIFT connectivity in Cambodia

Background

After expanding to Cambodia, one of the global elevator companies was seeking a cash management solution.

BOC Phnom Penh provided a customised collections and payments solutions that includes SWIFT connectivity and local cash pooling.

A tailor-made technical solution
BOC Phnom Penh worked with BOCHK to provide a state-of-the-art banking infrastructure for the company’s Cambodian business, supported by development teams in India and the US.

The key elements of the solution include:

• Adopting a specific format for SWIFT connectivity to create a secure and reliable channel for the customer to exchange a large volume of structured messages. A customised payment collection message is used for detailed intra-day or end-of-day reconciliation. Multiple languages and customised content  are also possible.
• Sending payment instructions to the bank in real time. If payment instructions are initiated after the cut-off time, the payment will automatically be held until the next working day.
• Implementing SWIFT GPI as an advanced technology which can help increase the accuracy, transparency and traceability of payment information.
• Supporting cross-currency payments – for instance, the client can easily make RMB payments with its USD accounts.
• Establishing local cash pooling in different currencies as part of the company’s daily operations. The primary account is identified as the payment account, which enables the client to make payments directly through SWIFT. The subsidiary account is used as the receiving account; funds received into this account can be automatically swept to the primary account on a daily basis.

Overcoming implementation challenges

One of the biggest hurdles for BOCHK was to deliver the solution within a tight deadline with no scope for delay, plus in a country like Cambodia, where culture and regulations differ, and infrastructure and the business environment continue to evolve. At the same time, the customer’s operations, management and development teams are located in Vietnam, Singapore, the US and India, further adding to communications cost and time.

After identifying all potential challenges, BOCHK set up an elite cross-functional banking team, including experienced staff in BOC Phnom Penh, product experts in BOCHK and technology specialists in the software centre in the Mainland head office.

To meet the tight schedule, the end-to-end process was streamlined, starting with a tailored account-opening KYC service outlining the documentation requirements. Other banking resources were also provided to further speed up the project. For examples:

• To overcome network instability in Cambodia and ensure smooth communication within all participants globally, BOCHK undertook a new initiative to centralise product development, project management and service support in Hong Kong.
• To support cross-currency payments, the software centre introduced a number of cash management enhancements in Cambodia and provided extra technical support with system upgrades and integration.
• Global group meetings were held at least once a week to check the status, exchange information and resolve potential problems.

During implementation, BOCHK’s cross-functional team surmounted many obstacles, such as time zone differences, language gaps and local infrastructure limitations.

The team successfully delivered the solution within six months,applying several advanced features in the delivery, such as SWIFT GPI and a cross-currency payment service. These efforts demonstrated exceptional teamwork, a customer-centric mindset and creative thinking - all of which were well-received by the client.

A win-win solution

The partnership between BOCHK and the company created the following positive outcome for all the stakeholders:

• Creating a world-class payment offering – The solution implemented by BOCHK helps the client replace the traditional cumbersome payment workflow with a centralised and automated system. The processes of initiating payments and checking account information are now transformed and streamlined into a push-button effort, which is faster, more reliable and secure.
• Fostering a long-term partnership – The connectivity has solved the client’s difficulties and has been smooth since going live. The customer values the reliable settlement service, and has since selected BOCHK as its main banking partner in Southeast Asia.
• Improving service capacity – By participating in the whole process, from proposing the service plan to publishing the new service, BOC Phnom Penh has enhanced its product metrics and further reinforced its understanding of the local market and the needs of transnational companies. This experience will undoubtedly enable the bank to further implement top-notch cash management projects for companies in the region.
• Adapting pioneer technology for Cambodia – To meet the customer’s needs, several enhanced cash management products and technologies, such as SWIFT Connectivity and SWIFT GPI, were introduced to Cambodia. The introduction of upgraded cash management tools will not only help the client to digitalise its fund management journey, but will also elevate the digital transformation potential of the country as a whole.

Ultimately, with this new system in place, the company’s leadership teams in Vietnam and Singapore can now centralise and automate the management of funds for the Cambodia business. This increases productivity and reduces manual risk.