Treasury Management Systems: The Treasurer’s Perspective

by James O'Neill, March 2, 2015
Vendor Reviews
North America

Abstract

The systems supporting treasury management have evolved significantly over the past 30 years, reflecting the underlying market and regulatory changes that have come to impact the work of the corporate treasurer. This report tracks the primary areas of management concern for today’s corporate treasurer, translating these areas of management into system requirements that a solid TMS system ought to support.

As the scope of treasury management services (TMS) has evolved over the past 30 years, so have the systems that support TMS. Technology has supported the corporate treasurer in the face of market and regulatory change, and in many cases has driven some of the very changes that treasurers have turned to technology to help manage, creating a virtuous circle in the functional development of TMS systems.

The evolution of the financial and capital markets and introduction of greater competition to these markets has been a double-edged sword for today’s treasurers, presenting both greater potential for generating investment returns and greater financial risk that needs to be monitored and managed.

This report provides an overview and history of technology in TMS and examines the role of the corporate treasury group in today’s firms — represented by the seven M’s, or areas of management, in treasury operations. The report then introduces the seven R’s of TMS systems — the seven groups of requirements that drive the TMS systems selection process.

“After years of merger-driven consolidation in the marketplace for TMS systems, things are finally settling down,” says Jim O’Neill, a senior analyst with Celent’s Banking practice and author of the report. “At the same time, corporate treasurers continue to seek TMS solutions that allow them to work efficiently in their daily treasury operations and provide them with flexibility and agility in managing the ever-changing world of the capital markets, all while offering a reasonable point of entry in terms of pricing of the TMS solution.”

Future reports will begin to examine the vendor landscape to determine who the leading TMS system players are — both on the bank side and the vendor side — and to assess how these players perform in meeting the needs of their corporate clients.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

2

TMS Systems: A Short History

3

 

Enabling Technologies

3

 

Treasury Workstations

3

 

EDI and Messaging Standards

4

 

Impact on Role of Corporate Treasurer

5

The Seven M’s of Modern Treasury Management

6

 

#1: Liquidity Management

7

 

#2: Investment Management

11

 

#3: Capital Management

13

 

#4: Risk Management

13

 

#5: Bank Account Management

15

 

#6: Financial Management

16

 

#7: Technology Management

16

Bank-Provided Vs. Vendor-Provided Solutions

18

 

Bank-Provided TMS Solutions

18

 

Vendor-Provided TMS Solutions

20

TMS Requirements: The Seven R’s

21

 

#1: Data Collection

21

 

#2: Forecasting

22

 

#3: Transaction Management

23

 

#4: Account Reconciliation

24

 

#5: Reporting and Dashboards

24

 

#6: Integration and Enterprise Systems

25

 

#7: Entitlements and Workflows

26

What’s Next

28

Leveraging Celent’s Expertise

29

 

Support for Financial Institutions

29

 

Support for Vendors

29

Related Celent Research

30

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