XPS Pensions Administration is one of the largest pensions consultancies in the UK. They manage the day-to-day administration of over 1,000 corporate pension schemes, administering pensions for more than 870,000 members and employing around 1,200 staff across their 15 UK locations.
“Having grown from its actuarial advisory businesses, the number of schemes under XPS’ administration had continually grown. Each pension scheme by necessity has a standalone bank account, meaning the legacy manual processes to support each account were being tested to the limit,” said Peter Robinson, XPS’ Head of Client Banking.
Enhancing control over bank accounts
With plans in place for further growth, XPS knew that its expansion was reliant on its ability to successfully manage an increasing number of bank accounts. However, when researching the market for solutions from banks, they could not find what they needed.
“What the banks were offering was not going to fit with what we wanted. They were all ‘out-of-the-box’, unconfigurable solutions.” said Robinson. The pension schemes using XPS come with more than 300 sets of trustees, each with specific sets of requirements concerning transaction signoffs and authorisations on their mandates. The limits to platform configuration were a significant stumbling block because authorisation and access controls around multiple users and mandates could not be designed at trustee level.
Having realised the banks’ solutions were not suitable for their requirements, XPS explored the wider market and directly approached cash management technology solutions.
Self Service Banking and Account Management with Cashfac Virtual Accounts
“We spent some time with our short-listed vendors, working through the kind of functionality we needed. Making the system scalable and future-proof was essential,” mentioned Robinson. XPS selected Cashfac’s virtual accounts platform as the best fit for their requirements of having a single view of cash and liquidity management, payments and receivables management and client money management. “The system did require some configuration to meet our unique requirements, but it was great that we could sit down and build it with them.”
The implementation of Cashfac’s cloud-based virtual accounts platform took approximately six months. The roll-out, which enabled the solution to be closely integrated with XPS’ accounting systems, saw each iteration revealing the full scope of XPS’ requirements. Cashfac’s implementation and consultation teams helped steer the project to such an extent that XPS could take advantage of platform functionalities that existed outside their initial scope. “Although I look back and can see that we had more foresight than we first thought, there were certain aspects that we hadn’t thought about that we were able to incorporate” added Robinson.
Single View of Cash Management Operations
With four main banking partners, each bank partner had numerous real bank accounts held within them on behalf of XPS. Through the adoption of virtual accounts, an enhanced layer of cash management functionality has been implemented meaning XPS no longer depends on the banks each time it needs to make a change to account permissions and access controls. “It’s under our control through Cashfac, rather than having to update users through the banks’ systems,” Robinson explains. “This is a real bonus.”
Over 500 users across the XPS network now have access to Cashfac’s virtual accounts platform. Administrators have greater jurisdiction overpayments, collections and investments, through a single “one-stop-shop” view, within which they can generate a point-of-input analysis for every transaction.
Automatic Cash Control and Accounting
The virtual accounts structure provides a more granular view of client accounts, meaning greater visibility into contributions and cash movements within client fund accounts to mirror sub-ledger accounting within primary systems “Because local administrators are now able to interrogate the Cashfac solution directly, rather than having to request information from the accounts team, they can respond directly to member enquiries.” said Robinson. Virtualising the account structure has allowed for faster reconciliation of client accounts and has reduced the chance of breaching client money regulations by providing an extra layer of efficiency and protection.
Managed and Cloud Services
Being a cloud solution, the IT resources required by XPS to run a virtual accounts platform are minimal. XPS can run their reports (written, with foresight, at the time of the build – and not yet requiring a revisit), with Cashfac running several daily processes on XPS’ behalf seamlessly in the background, to not disturb day-to-day processes. “Just being able to outsource that responsibility has been very useful,” added Robinson.
The managed services team at Cashfac manage all data transaction upload and downloads with each bank, and undertake key system administrative tasks, meaning that specialist teams are not needed within XPS to run the solution.
A Platform for Growth
Since going live, there have been a few additions to the virtual accounts platform, such as a link to XPS’ electronic document management system. As this uses a URL rather than a hard-wired integration, there is no point at which any confidential client data can be viewed by Cashfac – a factor that was vital to get right from the outset.
Cashfac’s solution has become an “integral part” of XPS” operations said Robinson. There are plans for XPS to on-board public sector pension schemes. These have a markedly different set of administrative requirements, but Robinson has complete confidence that Cashfac’s system flexibility will be able to incorporate these changes: “The ability to have input into the build in the first instance is why it is doing what we want it to do.” he states. “If we’d picked something out-of-the-box, then we’d always be thinking ‘wouldn’t it be good if we could just…’. There is no way we could do what we do today if we were using our old manual processes”.
Get in Touch
For more information on how Cashfac can help Pension Administrators or to discuss your business requirements, contact the team using the form below.