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How a Hazeltree & StoneX Technology Services Collaboration Enabled Seamless Cash Transaction Initiation, Activity Reporting, and Monitoring for Financial Organizations
One of the biggest challenges faced by financial companies that require interfacing with many banking partners is the complexity of managing each interface. With each banking relationship requiring its own set of protocols for logins, transaction initiation, data security compliance, and reporting requirements, management becomes overwhelmingly complex. This is why a number of financial companies are opting to implement a dedicated centralized platform that manages these various banking relationships and cash positions. The collaboration between StoneX Technology Services and Hazeltree has resulted in the creation of such a platform for a major investment firm that now allows employees and fund administrators to access permitted info and transactions on relevant cash accounts or activity in one place.
How StoneX and Hazeltree Work Together
Until recently, the organization had to monitor these positions manually, with each banking relationship requiring a dedicated login. Now, platform users can manage all cash positions and information across accounts in one centralized hub, built by Hazeltree. Moreover, StoneX provides access to the Swift network allowing transactions and position updates to be completed in an automated and seamless fashion. In this collaboration, StoneX acts as a pipe between financial institutions and Hazeltree. It delivers financial data into Hazeltree software systems, whereby it can be viewed and accessed in the organization’s centralized platform.
Implementing a Next-Generation Treasury Management System
In 2023, the client needed to develop a treasury management system. Specifically, it needed an alternative to its current process of initiating cash transactions as well as that of monitoring and reporting cash activity, as they were fragmented between different systems and banking platforms. Initially, it considered Secure File Transfer Protocol (SFTP) as a means to consolidate access and interfaces to various banking relationships. However, they determined this would be highly inefficient. On the recommendation of LionPoint, they decided instead to utilize Swift and use StoneX as a service bureau to implement such access in collaboration with Hazeltree. This is key, as many of the organization's banking relationships could not accommodate the previously envisioned SFTP connectivity. Moreover, when attempting to set up connections with banks by SFTP, each report can be formatted differently and require different information. This becomes increasingly difficult to manage with a high number of bank relationships.
As a result of StoneX Technology Services (STS) acting as the service bureau for implementing Swift, a standardized set of controls and wire workflow procedures was able to be implemented that are consistent across banks. This means that unlike the SFTP alternative, onboarding, maintenance, reporting, and monitoring processes are now standardized, regardless of the bank infrastructure, across the board. The implementation of Swift has also created significant efficiencies in processes. Most notably, it has provided the organization with the ability to originate wires from all banking relationships in one place with a singular login resulting in considerable operational efficiency. It has led to the reduction of costs that would have otherwise been incurred for the use of 3rd-party cash tools. Additionally, Hazeltree has provided the organization the ability to utilize cash optimization features to automate transfers to short-term investment alternatives (i.e. money markets, etc). Many other features are currently being implemented that are expected to further create efficiencies in debt management, risk management, collateral management, and FX hedging in Hazeltree. In addition to the service bureau, StoneX has added value with regard to the Swift application process, maintenance of RMAs with banking relationships, troubleshooting issues with MT reporting, and completion of 3rd party attestation. The development of this platform marks a new era in treasury management, and has opened new doors for financial firms to make such improved access and transparency available to their employees, customers, vendors, and fund managers without risk of non-compliance. If you would like to discuss the creation of a similar centralized hub to manage banking relationships and cash positions using Swift for your organization, please get in touch with STS or Hazeltree. You will also be provided the opportunity to discuss this with the anonymous firm described within this case study.