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Putting Treasury Objectives into Practice We feature the views of three of the key TMS vendors on the tools that treasurers are using to realise their main objectives, specifically the TMS that typically forms the core of their infrastructure.

Putting Treasury Objectives into Practice

by Helen Sanders, Editor

We have reported extensively in TMI how liquidity and risk management are now firmly established as treasury priorities, with treasurers now taking a more prominent role in their company’s management team. We also know that their relationship banks have an important role in facilitating the information, transaction flows and financing solutions that treasurers need to fulfil these responsibilities. Less attention has been given, however, to the tools that treasurers are using to realise their treasury objectives, specifically the treasury management system (TMS) that typically forms the core of their infrastructure.

This article features the views of three of the key TMS vendors: SunGard, IT2 and Thomson Reuters on how client demands and opportunities are evolving, and the likely functional and technical future direction in the TMS market to address these.

From complexity to clarity

Putt’s Law states that, “Technology is dominated by two types of people: those who understand what they do not manage, and those who manage what they do not understand.” Since the financial crisis in particular, treasurers are trying to prove this law wrong, by managing what they truly do understand. As the need for effective liquidity and risk management has been accentuated, this in turn has led treasurers to seek greater confidence in the data that forms the basis of their decision-making. This has been the fundamental driver behind many technology projects over the past year or so, as Paul Bramwell, SVP, Treasury Solutions, SunGard explains,

“We are still seeing the fallout from the global financial crisis as clients go ‘back to basics’ to optimise visibility and control over their cash and risk. Large and smaller companies alike are putting rigorous processes in place to consolidate data and processes to ensure that decision-making is based on integrity and timeliness of information.”

Putt's Law states that, "Technology is dominated by two types of people: those who understand what they do not manage, and those who manage what they do not understand."

Yan de Kerland, Head of Product Management, Corporate Treasury, Thomson Reuters agrees, and emphasises too that as exposure and cash flow data is generated across the business, there needs to be a robust and convenient means of accessing this data,

“Cash flow efficiency and working capital management are amongst our clients’ key priorities. Since the global financial crisis, easy access to credit has become a distant memory, so it has become even more important for treasurers to ensure that the right amount of cash is available, at the right time, in the right currency and in the right place. Consequently, treasurers are seeking better visibility and control over cash, which often means providing remote access to business unit users, using a tool such as Thomson Reuters’ KTP Web, so that treasury can manage cash at a group-wide level, such as acting as an in-house bank.”

Kevin Grant, CEO, IT2 Treasury Solutions emphasises treasurers’ focus on risk management,

“Over the past year or so, risk management has become a major focus of demand amongst corporate treasurers, who are using new metrics, e.g., credit default swaps, for measuring counterparty risk. To support this, we have opened up our reference data for risk management, so that our clients can integrate whatever metrics or reference data they wish in order to manage their counterparty risk effectively.”

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