The Treasury Management Systems business continues to consolidate, e.g. ION takeover of Reval, but the independents, e.g. Salmon Treasury, DataLog Finance, etc. continue to thrive as the market for TMS grows. It seems to be far bigger than most experts predicted.

Many and varied solutions

Recent development show how treasury management solutions are being put together:

• Kyriba - the cloud based TMS solution is used by Spotify whose goal is to “create a world class treasury to support short and long term business expansion. As a small team, we needed a secure, robust and scalable solution that integrated well with our systems, and found that among other technology partners, Kyriba was aligned to support our needs.”
• Visual Risk has installed their system at Heritage Bank in Australia, with the Assistant Treasurer saying, “Selecting Visual Risk has helped us take a fresh look at our treasury workflow operations with a view to increasing efficiencies whilst maintaining the core integrity of our processes. The system has fit seamlessly into our core banking and accounting platforms and has made data more accessible”.
• Largest not-for-profit health care supplier in Texas instals Reval’s cloud-based treasury system to automate cash management, bank connectivity, liquidity planning, intercompany loans, in-house banking and pooling, investments and debt, and interest rate hedging
• OpenLink, a provider of trading, treasury and risk management solutions for the energy, commodities, corporate and financial services industries, have announced the completion of a major upgrade of its energy trading risk management system at Mabanaft Ltd. The project will significantly reduce costs, increase automation and give Mabanaft Ltd greater granularity and control of its risk data. 
• TreasuryXpress, a provider of frictionless and on-demand treasury management software, have announced that major pharmaceutical product distributor, Omnipharma, has selected the firm’s enterprise treasury management solution, C2Treasury™, to help achieve greater control over their bank account management and cash management processes. 
• Spreadsheets are still being used to construct TMS solutions, e.g. a corporate treasury department who have one of the most complex cash flow forecasting and hedging programme solutions all constructed in Excel because “no TMS solution is flexible enough.”

The current solutions

There are now six basic types of treasury management solutions built around:

• Spreadsheet based functional processes, e.g. In almost every corporate treasury department  
• Connectors + varied: - managing the reporting and linking from the corporate treasury department to their banks and other FIs PLUS a TMS or Excel model to manage deals and risk exposures, e.g. TIPCO, Bottomline Technologies Universal Aggregator + TMS if needed
• Low cost purely cloud based solutions, e.g. Bloomberg’s TRM, TreasuryXpress 
• General TMS solutions - either stand-alone or increasingly cloud based - providing the basic cash and treasury functions + integrating key partner such as connectors, FX and investment dealing platforms, e.g. BELLIN, Kyriba, Reval, ION’s IT/2 and CityFinancials, 
• Specialist TMS which as well as offering general TMS coverage also offer specialist functionality in may areas, e.g. OpenLink - commodity management, Visual Link - bank treasury
• Large scale, comprehensive TMS, e.g. FIs’s Quantum, ION’s WallStreet Suite.

New TMS model emerging

In the age of ‘easy’ connectivity and inter-change between applications via increasingly effective APIs, a new model for TMS solutions is emerging which some are embracing and others fighting. The new model involves separating the transaction/deal processing and database management from the risk assessment and analysis.

In a recent discussion on corporate treasury systems, one corporate treasurer mused, “If only I could do all my transaction and deal processing on SAP which would keep my IT department happy, and then all the advanced analysis and risk management on Bloomberg. Then I would be happy too.” 

The TMS providers immediate reaction is that it is much easier if it is all integrated into our one solution. However, many corporate treasurer will react, “But in this specific area, I need something way beyond what you will ever provide.” There is no way these two approaches can come together.

This trend, this change will take time, but in the long run it will result in there being three basic types of TMS solution:

1. Pure transaction and deal processing and management systems
2. Pure hedging and risk management systems, e.g. FINCAD solutions, Bloomberg range of Apps connected to the pure transaction and deal processing systems
3. General TMS that have their own combination of Types 1 and 2.

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CTMfile take: As corporate treasury advances and corporate treasury department’s start to use big data in their analyses and as risk management becomes ever more sophisticated the general Treasury management systems are going to struggle. Two key question in selecting TMS are now how good is your: 1) transaction and deal processing and management, and 2) ability to integrate to other systems’ APIs?