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Treasury systems: Is integration-on-demand the way to go?

The customer is always right? Yes? Well not always, they ask for things they don’t really mean or need. Steve Jobs and Jony Ive at Apple would spend months, if not years, trying to work out what  ‘customers’ really wanted. Peter Drucker, THE Management Consultant famously wrote:

  • The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself
  • The purpose of business is to create and keep a customer.

Corporate treasurers, one of the key customers, in corporate treasury solutions are inherently conservative, risk-averse and cautious, for which their employers must be very grateful. They tend to prefer well estabished solutions rather than going out a limb and testing latest technology, the latest solution. They tend to prefer well established, integrated systems rather than putting together their own solutions made up of systems from different suppliers, but is this caution holding them back from the way technology is going?

Two types of solution are emerging:

  • Full single supplier solutions which cover ‘all’ the basic functions needed
  • Integrated multi-supplier solutions that bring together the solutions that meet the corporate treasury department’s needs.

Full single supplier solutions

Typical examples of this approach, this type of solution are from Kyriba and GTreasury, which requires significant development to meet the corporate treasury department’s needs. This is a never-ending process and when the expertise required in an area is too great, the reaction is to buy the necessary solution and functionality, as Kyriba did with their acquisition of FiREapps and GTreasury did with their acquisition of Visual Risk.

Kyriba recent purchase of FiREapps generated various reactions:

  • US-based corporate treasury consultant, “For Kyriba this a great strategic play. It will allow Kyriba to deepen their capability in FX hedging. This is what the US market, in particular, is looking for.” 
  • US-based global corporate treasurer: “FiREapps is best of breed in terms of aggregating FX exposures from many sources.” However, he felt that the question with these type of acquisitions, not just Kyriba’s, is how long will it take for them to make a fully integrated solution. 

Integrated multi-supplier solutions

We are in the age of the API which theoretically will allow suppliers to link all sorts of systems into one integrated solution - this is the PSD2 dream. TreasuryXpress’s announcement of their on-demand treasury management integration with Ebury, see, opens the door to integration with other systems in a matter of days.

According to Tom Leitch, Chief Operating Officer of TreasuryXpress: “What we have created with our integrated solution, is a single platform where clients can handle the entire lifecycle of an FX trade. From accessing the best, most competitive rates to executing the trade and settlement through to creating the accounting entries, we have removed the cost and resource barriers associated with traditional FX trading.  We have enabled our clients to reduce the cost of their FX trading programs while optimizing their treasury management operations.” 

The natural caution of corporate treasurers comes into play here. The US-based corporate treasurer commented that “It is a complicated sell and the installation needs to be ‘IT light’.” The TreasuryXpress ‘on-demand integration’ model really is IT light.

CTMfile take: The battle between these two models is really beginning. The issue is how seamlessly and easily do all the parts, the systems fit together AND whether the corporate treasury departments can be convinced.

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