After the company had grown through a series of major acquisitions, Comcast Capital Corporation had to navigate cash and liquidity management structures that were complex and fragmented. To create shared liquidity and access cash in a more efficient manner, the treasury team implemented an in-house bank structure.

The AFP Treasury Case Study series is designed to help you build up key treasury capabilities and skills by sharing examples of how leading practitioners have tackled challenges in their work and the lessons learned.

This case study is based on Comcast Capital Corporation’s 2022 Pinnacle Award entry, for which it was recognized as a Pinnacle Award finalist.

Insight: For a multinational organization with complex external banking structures, an in-house bank structure can achieve significant operational improvements and cost savings.

Company Size:	Large
Industry:	Technology, Media and Telecommunications
Geography:	Multinational
Topic:	Liquidity Management

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One of the largest American multinational telecommunications conglomerates, Comcast Corporation’s reach is global, as are its scale and scope of activities. In the last five years, Comcast has acquired six companies, including its largest acquisition, in 2018, which was of British broadcaster and telecommunications company Sky ($38.8 billion). The combined Comcast NBCUniversal Sky organization is the second largest broadcasting and cable television company in the world by revenue and is America's largest home Internet service provider.

These acquisitions meant that Comcast had accumulated 100 bank relationships and 3,800 bank accounts across more than 500 entities. With multiple separate cash pools and standalone cash structures, the complexity and fragmentation of their cash and liquidity management structures was incredibly challenging.

Challenge: The Work or Difficulty Treasury Had to Address

In 2019, the treasury team of Comcast decided to implement an in-house bank (IHB) structure in order to:

• Enjoy the benefits of this combined organization.
• Move toward an optimal banking structure.
• Create shared liquidity.
• Access cash in an efficient manner.

With the global pandemic in 2020, the project was paused. Treasury’s attention instead turned toward handling the rapidly changing business flows (e.g., parks closing, internet and online entertainment booming).

When the project was able to resume, the team found themselves with limited resources to work with and therefore pivoted to making this a progressive regional project rather than concurrent global project. The region they chose to start with was Europe, Middle East and Africa (EMEA). With this, the team also decided that in order to centralize its surplus liquidity, they would build a semi-automatic global IHB structure.

What made this a significant undertaking was the number and diversity of Comcast’s businesses and stakeholders, the number of payments and collections processes that ran each day, and the number of backend systems that would need to be interfaced.

Approach: How Treasury Addressed the Challenge

The transformation project was based on global design principles, which could then be applied on a regional basis. The team instituted a multipronged approach that included:

1. Reforming the liquidity structure and implementing new technologies.
2. Rationalizing global transaction banking partners via an RFP.
3. Updating related bank documentation.

The group already had the treasury management solution in place, but it was being underutilized. To correct this, the team:

• Expanded the system use to in-house banking.
• Enhanced cash management.
• Linked to its internal ERPs for automated general ledger integration.

Outcome: What Came of Treasury's Efforts and What Was Learned

Comcast’s treasury team managed to develop truly cross-business, standardized and centralized services, solutions and systems in their efforts to create operational efficiencies that would benefit the entire global organization. Their achievements include:

• Reducing the banking structure in the EMEA from 24+ banks to 6.
• Reducing the banking structure in North America from 30 banks to a target of 4.
• 80% of cash is now centralized in the EMEA (up from 55%), making an additional $1 billion+ available in liquidity.
• 1 SWIFT connection and 6 host-to-host and e-banking systems in the EMEA are now doing the work of the previous 2 SWIFT connections, 22 e-banking systems, 10 host-to-host banking connections and numerous manual uploads.

Through this careful and thoughtfully designed bank and IHB structure, systems and connectivity infrastructure, the company has achieved significant operational improvements and cost savings, as well as greatly improving its resilience and security platform.

Since the restructuring, the team has drawn up plans to roll the structure out to other regions over the next two years.

Those considering a similar avenue should consider the following advice:

• Create a wave rollout that is both ambitious and achievable to avoid ripple effects on the core team and allows wave learning to apply to the next phase.
• Make sure each stakeholder understands the benefits and their delivery role, timing and resource needs; get a commitment on who shares the costs.
• Involve relevant technology and cyber teams early on and at the management level in order to help identify issues and champion solutions.

Want to know more? Learn how to structure an in-house bank.