General Electric (GE) is the one of the world’s oldest and largest industrial manufacturers with roots that can be traced back to the late 1800s and Thomas Edison’s lab. The 142-year-old company touches nearly every aspect of today’s economy, from healthcare and aviation to energy production and finance.
The company has become known for the sophisticated digital technologies and engineering that go into many of its front-end commercial applications. GE has recently sought to bring digital optimization to its back-office payments processes as well. A key part of this effort is cross-border payments, which are vital to keeping supply chains running smoothly and securely in the more than 100 countries in which GE operates.
The pandemic’s ongoing economic impact has naturally raised the stakes for effective and efficient cross-border payments, according to Shreya Fatehpuria, inter-company and foreign exchange (FX) payments leader at GE.
“We’ve suffered losses with the company. Our aviation business took a huge hit earlier this year because of all the travel restrictions and airplanes being grounded,” Fatehpuria said in recent interview with PYMNTS. “There’s always a continuous assessment regarding your top line [as a company], but you also have to think about the bottom line, and cost efficiency becomes a huge metric in that space.”
GE has thus embarked on a largescale ongoing effort to digitize its cross-border payments processes.
The company is hardly alone in facing headwinds in the current economic climate, either, which can pose additional challenges for multinational companies. The average global company works with at least six banks and 40 percent of them make payments in at least six currencies. This can give rise to many friction points, such as document-intensive approval processes, varying bank operating hours and onerous fees. Addressing these pain points are among GE’s key priorities as it upgrades its FX operations.
“We’ve always wanted to make [payments] as efficient and quick as possible at the lowest possible price, without compromising the quality,” Fatehpuria said. “The quicker we can get the money out the door and to the end supplier with as low cost as possible — that’s what drives this.”
This process has been fairly manageable when it comes to developed economies, but it can be a different story in the developing world. Fatehpuria credits the company’s banking partner with being instrumental in helping GE manage some of the more complicated aspects of optimizing cross-border payment flows.
“We have our own challenges which we will need to work through [when it comes to] automating and digitizing payment flows and reducing touchpoints,” she said. “It … also depends on the bank your partnering with, so … us moving to Citi was a pretty strategic move for us last year, because it has a global presence and we have been able partner really well in this space.”
Fatehpuria added that GE is working toward integrating real-time payments into its cross-border operations, which could help mitigate many of the challenges endemic to transnational B2B payments, including limited banking hours and batch processing.
“Treasury is in the middle of upgrading our FX infrastructure,” she said. “We’re still a ways away from [real-time payments], but we’re laying down the foundation blocks now so that we can actually start thinking about more concrete steps as we progress through the current activity that we have laid out in front of us.”
The pandemic has clearly exposed the shortcomings of many legacy business practices, particularly those that rely on in-person, manual processes. The cross-border element further complicates matters for multinational companies.
GE’s treasury department experienced this firsthand in the early days of the pandemic, when China imposed a full shutdown on businesses. The company could not perform vital activities without its in-person staff at its office in Shanghai.
“Our treasury operations team was considered essential and had to go in with the full PPE in order to make sure that the lights didn’t go out,” Fatehpuria said. “So, these are things that we had to accommodate at the time, but … I expect these processes to become easier in future — at least I hope so.”
GE is doing — on a very large scale — what businesses across different industries and around the world are doing: strategically adapting to a changing economic and social reality. Fatehpuria notes that while the company’s aviation division has been adversely impacted, there is pressing demand on its healthcare division.
“Businesses tend to offset some losses based on industry and market cycles. During the pandemic and at various other times, businesses like healthcare step up to cater to the needs of the medical industry … All of this is what instils the pride that the company functions where it matters most,” she said. “Our team can actually make a lot of difference and do good, which is what matters at the end of the day.”
Having more efficient and effective cross-border payment operations is thus a key aspect of ensuring that a company can stay focused on its essential mission.