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  • Top PMO Risks that may Derail your Treasury Management System Implementation

    When it comes to implementing a new treasury management system, banks can be like deer caught in the headlights. There are several unknowns that come into play: Which technology should be used? Will the system align with business priorities? Will the system be implemented within the defined timeline and costs? Will it be able to keep up with new competitors and adapt to new regulations? PMO teams play a significant role in addressing these questions and are pivotal to the success of treasury management system implementations. Although, completely failed implementations are rare, majority of implementations do encounter cost overruns and substantial delays. Post implementation, most banks also realize that there is a gap between the intrinsic value of the treasury technology they chose and their ability to reap benefits by getting it to work effectively.

    Over the years of helping banks and their PMO teams implement treasury management systems, we have realized that project management has significant influence on how an implementation project shapes up. We have outlined a comprehensive list of PMO risks that will help PMO teams pinpoint where their treasury management system implementation may go wrong:

    • Lack of right metrics to control the program

    • Support and availability of integrating teams such as Operations, Host and ARP

    • Less involvement from business teams right from the start

    • Gaps in requirement documentation and interface requirement documentation

    • Schedule slippage

    • Unplanned environment downtime

    • Software Configuration (and Release) Management issues

    • Delay in signing off on requirements / customizations by all stakeholders

    • Defect backlog

    • Business continuity planning and disaster recovery issues

    • Gaps in scheduling of interface development

    • No thought given to knowledge management

    • Lack of clear roles and responsibilities and single points of contact

    • Gaps in communication and reporting protocol

    • Coordination amongst various vendors and SLA management

    • Poor prioritization of customizations, code drops and interface development

    • Poor estimation

    • Scope creep

    • Absence of risk management practices

    • Ineffective quality assurance and quality management

    An experienced PMO team needs to be aware of such PMO risks and should be able to devise mitigation strategies before budget and time creep threatens to derail the project. Product Management and IT teams need to support PMO teams in this. There is a tremendous upside to avoiding these risks. Not only will you be able to ensure that the implementation project meets time and cost goals, you will also be able to rapidly start realizing ROI from the treasury management system. Can you think of any other PMO risks that you may have faced during an implementation?

    August 8, 2016
  • Same Day ACH: What You Need To Know

    On September 23, 2015, the Federal Reserve approved NACHA’s Same Day ACH solution. The move will help businesses and consumers move money faster through same day settlement for practically any ACH payment.

    For several years, the industry has been interested in improving ACH settlement and processing. A similar such same day proposal by NACHA was voted down in 2012 due to lack of sufficient business rationale. Over the next three years, NACHA engaged with the industry and came up with a revised proposal with ten distinct business cases to support same day payments. This time around, Same Day ACH meets the needs of customers for uses cases such as payroll, bill payment, urgent claims, invoices and taxes amongst others. It’s an example of how the industry is perceptive towards its consumers’ needs and is working towards providing them with the payments speed they deserve.

    Same Day payments will be rolled out in three phases over the next two years so that financial institutions and businesses have sufficient time to adapt their processes and operations for same day settlement. Same Day ACH payments will be an option provided in addition to the existing ACH schedules.  A fee will be imposed on Same Day ACH transactions to help receiving financial institutions recover the costs of supporting Same Day ACH.

    The date when Phase 1 of Same Day ACH rolls out is looming ahead of us – September 23, 2016. In Phase 1, only ACH credits will be processed on the same day.  Phase 1 will focus on supporting use cases such as hourly payroll, person-to-person payments and same-day bill payments. Same Day ACH debits will be rolled out in Phase 2 which is proposed to begin in September 15, 2017. Phase 2 will support a wider range of consumer bill payment use cases such as credit card, utility, mortgage and loan payments.

    For both Phase 1 and Phase 2, two new clearing windows will be provided by the ACH Operators to allow originating financial institutions to submit Same Day ACH Payments files viz.:

    • 30 a.m. ET with settlement at 1.00 p.m.

    • 45 p.m. ET with settlement at 5.00 p.m.

    In Phase 3, which is scheduled for March 16, 2018, receiving financial institutions will be required to make funds available to customers by 5.00 pm local time for same day credit entries.

    Other than international transactions and transactions exceeding $25000, all types of monetary and non-monetary ACH payments (credits and debits) except ENR (Automated Enrollment entry) will be eligible for same day processing.While Same Day ACH origination is optional, it is mandatory for participating ACH financial institutions to process incoming Same Day ACH items.

    Same Day ACH will definitely have an impact on day-to-day operations and financial institutions will have to consider the following as outlined by NACHA:

    ODFI (Originating Depository Financial Institute)

    • Figure out the new file submission and delivery schedule with their ACH operators

    • Revise internal processing schedules and procedures to accommodate new windows for Same Day Entries

    • Review applications and systems that may be impacted by Same Day Entries

    • Gather information from the ACH Operator regarding collection of Same Day Entry fees

    • Create a procedure to hold payment entries that are received from an Originator in the same day window but that is not the Originator’s desire

    • Indentify customers and business models to offer Same Day

    • Discuss eligibility requirements for Same Day Entries

    • Discuss proper use of the Effective Entry Date and impacts of improper Effective Entry Dates.

    RDFI (Receiving Depository Financial Institute)

    • Figure out the new file submission and delivery schedule with their ACH operators

    • Revise internal processing schedules and procedures to accommodate new windows for Same Day Entries

    • Processing entries based on the Settlement Date provided by the ACH Operator

    • RDFIs do not need to determine same day eligibility for processing

    • In Phase 1 RDFIs will only receive credit entries as same day entries. Beginning in Phase 2, RDFIs should be prepared to also receive debit entries as same day entries

    • Phase 3 will require RDFIs to provide funds availability at 5:00 pm local time for same day credit entries

    • Decide on whether to use the new same-day processing windows to send returns and NOCs

    • Getting information from ACH Operator regarding collection of the Same Day Entry fees

    Ultimately, Same Day ACH will make ACH processing only 12 hours faster than the standard next day ACH settlement. Same Day ACH is just a step towards the ultimate goal of immediate/real time and secure payments. However, it does offer every bank an opportunity to revisit the services they provide to their customers. Same Day ACH can help financial institutions modernize their payments systems for the time being and lay down a foundation for real time payments in the future.


    August 1, 2016

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