AES Corporation

AES Corporation was working with banks in 45+ countries that had 750+ accounts reporting electronically. AES needed a solution that would quickly and reliably standardize formats and enable automated bank statement delivery to its central treasury system.

• Fides ONEHub
• Hybrid Service Bureau
• Cash Management
• Validation
• Payments Management
• ERP & TMS Integration

• Aggregated, standardized transaction processing
• Reduced business risk
• Straight-through processing
• Improved operational efficiencies

The AES Corporation (NYSE: AES) is a Fortune 200 global power company that provides affordable, sustainable energy to 16 countries through a diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Its workforce of 18,000 people is committed to operational excellence and meeting the world’s changing power needs. The company’s 2016 revenues were $14 billion and it owns and manages $36 billion in total assets.

AES and its subsidiaries operate in sixteen countries over four continents, generating, selling, and storing electricity. In 2005, AES had financial operations in 45 countries. (This number has since been strategically reduced). As a company with an expansive global footprint, AES’ treasury staff needed a solution that would aggregate their bank and transaction information worldwide and deliver it to their central treasury management system.

The AES treasury department was tasked with building a strategic plan and implementing a treasury system that had global visibility into banking and cash. They wanted to split the banking portfolio into two pieces: one provider acting as a service bureau for bank connectivity, and a separate ERP provider, to have more flexibility for future growth. Their short list for connectivity providers came down to Fides and a global bank.

One area that AES needed assistance with is prior day bank statement delivery. The individual banks that AES connects with fall into three categories: SWIFT, BAI, and “neither one”. The latter produces consistently formatted bank statements, but the actual formats differ from bank to bank, making delivery a challenge. Banks simply are not able to work with all these different formats – but Fides can.

When a bank was not able to provide a SWIFT or BAI file, but could provide another type of format consistently every day (such as a .csv or even a PDF), Fides was able to write a parser specific to that bank or bank branch that will read and convert their format into the format of the client’s choice – for example, SWIFT MT940 – and deliver it to AES’ treasury system. Within six months of implementation, eighty percent of AES’ banks were on-boarded through Fides.

AES effectively outsources all of its banking interfacing to Fides. The company uses the backend account reporting services that Fides offers. For payment execution, AES uses the same process – but in reverse. Whether the company is executing a payment in its treasury system or accounts payable system, the payment is put into their single format of choice (in AES’ case, an MT101) and delivered to Fides. There are fields that are flagged to identify the payment as a wire, an ACH, or any other format. This provides Fides with the information needed to execute the payment. The files are automatically converted into the format required by the originating bank, and transmitted as if there were a direct host-to-host connection with that bank.

The ERP treasury system that AES was initially using ran into difficulties due to an input problem. A few banks were providing electronic bank statements that had the wrong number of decimal places for the local currency. When the ERP system received that file, it crashed. The ERP provider’s estimate was expensive and would have taken a significant length of time until delivery. Within one week, Fides was able to build and deliver a filter that could find and correct all instances of this incorrect formatting – at a fraction of the cost.

AES also takes advantage of Fides’ validity checking services. Fides reads all the bank statements are being received on AES’ behalf, and in the process of normalizing those statements into a common format, performs a validity check. Based on various criteria, exceptions can be flagged. For example, a bank account statement number may not be sequential, or an opening balance may not match a closing balance. Flagging these for review helps AES reduce risk and potentially catch any fraudulent activity early enough to more easily resolve.

In 2013, AES decided to change its treasury system provider. At that time, the company was processing electronic statements delivered from 750 bank accounts within various banks spread across 25 countries. The only change that was required was that AES had to set up the new TMS to receive the feed for incoming bank statements. The banks did not need to change anything, and Fides didn’t have to change anything. From the perspective of the TMS provider, there was just one single feed. This made what could have been a time-consuming, complex implementation, simple.

AES is currently exploring adding bank fee analysis services. Rather than establishing and maintaining interfaces from its treasury system to each of the banks that would be providing the bank fee analysis statements, the company intends to outsource this connectivity to Fides as well.

Fides is the world leader in multibank connectivity, payments and transaction communications. A market leader for more than a century, Fides is committed to making financial operations as efficient, transparent and secure as possible for all organizations. More than 4,000 clients rely on Fides for efficient cash and liquidity management, through connectivity to more than 13,000 banks and comprehensive workflow, reporting, conversion, validation and security services. Whether you access via the secure Fides ONEHub or leverage our seamless integration with third-party ERP, TMS and other backend systems, Fides is the only platform you need.