ACL Success Story – Banking & Finance – Fintrax Group Holdings Ltd.

2010-11-01

Fintrax Group Holdings Ltd.

“With automated data analysis and daily audit reports, ACL technology has strengthened our internal controls and provided invaluable corporate oversight.”

Paul O’Sullivan, Internal Auditor, Fintrax Group Holdings Ltd.

For over 23 years, the Fintrax Group has been providing multicurrency payments, credit card processing and VAT refund management to financial markets in 18 countries worldwide. The internal audit team recently implemented ACL audit analytics to automate transaction reconciliation processes and to introduce fraud monitoring on refund files. With ACL, Fintrax has managed to reduce labor costs while significantly improving the efficiency of cash refund analysis from overseas offices. The team has developed an effective fraud monitoring program and creates risk management reports based on daily data analysis. Senior management now have independent assurance that critical data processing is accurate, complete, and tested for fraudulent transactions and processing errors. ACL software has equipped this leading financial services company with deeper, more targeted business insight and better data visibility.

Customer Profile

The Fintrax Group is a financial services company specialising in multicurrency payments (Dynamic Currency Conversion), credit card processing, and VAT refund management for tourists (tax-free shopping) under the brand name Premier Tax Free. With global headquarters in Galway, Ireland and regional headquarters in Paris and Canberra, the Fintrax Group has in excess of 250 employees and offers DCC in 14 countries and VAT refunds in 18 markets worldwide. With over 23 years experience, Fintrax is an industry pioneer, providing world class payment services to overseas visitors, international retailer consortia, partner banks and acquirers.

Challenges

Recently, Fintrax signed its first bank as a customer. Fintrax is providing full Dynamic Currency Conversion (DCC) services for the bank’s merchants. The service provision requires Fintrax to provide data reconciliation for the partner bank, including:

• Checking the number and value of transactions submitted with the number and value of transactions settled by credit card schemes
• Producing exception reports for manual follow-up
• Creating a summary report of input files that outlines the margin calculation and margin sharing between the acquirer and Fintrax
• Ensuring that card scheme fees are correctly calculated on the acquirer’s input file
• Generating the accounting journal for that input file in the format required by Fintrax’s accounting system

Internal audit also wanted to analyse refund lists from subsidiaries and cash refund partners to identify potentially fraudulent transactions. Fintrax has separate business systems in different geographical locations, so these analyses were being performed manually with a time delay and a processing cost, or were simply not performed at all. The internal audit team needed a way to ensure that fraudulent situations and transactions are promptly highlighted for follow-up investigation.

Solutions

The internal audit team chose ACL audit analytics for its flexible, scalable technology and strong technical support from experienced staff. Fintrax also appreciated the ongoing training available through courses and web-based tutorials. Paul O’Sullivan, Internal Auditor, implemented ACL audit analytics in Fintrax’s Ireland head office and for audit projects in overseas subsidiary offices.

With ACL, the audit team replaced cumbersome manual processes and introduced new, fully automated analysis tasks. For example, manual DCC file reconciliations used to take approximately 4-5 staff hours per acquirer. With ACL audit analytics, the same process now requires just one hour to complete. ACL provides audit reports for each refund file on a daily basis, independently of the business systems. The team also applied ACL to implement an automated fraud monitoring program, which reviews all transactional traffic on a daily basis.

Results

ACL automation has cut labour costs and significantly reduced manual interrogations, enabling managers to redeploy internal audit staff into other departments. The automated reconciliation processes provide independent assurance to top management that data processing with acquiring banks is accurate and problem-free. Daily reports pinpoint errors and exceptions, and offer full coverage over transactional data.

The company’s new fraud monitoring procedures enable Fintrax to quickly identify suspicious or unusual transactions for manual follow-up. The team can prepare risk management reports for the DCC business and has effectively tightened internal controls.

Cash refund invoices from the Fintrax subsidiaries are now checked through automated processes carried out in the Ireland home office. Electronic connections to the cash refund partner provide a listing of cash refunds paid on a daily basis. These listings are then analysed with ACL software and compared to the listing provided with the invoice. Discrepancies are issued to the relevant overseas office for investigation before the invoice is paid – a process that has saved approximately 3-4 hours of reconciliation work per invoice and added significant business efficiencies.

Most importantly, ACL audit analytics have given Fintrax management more thorough, accurate corporate data to support strategic decision making. The internal audit department is driving audit best practices throughout the company with tangible benefits to subsidiaries and partners around the globe.