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Treasury Technology: Out with the Old, in with the New Generation

by Jiro Okochi, Reval CEO & Co-founder

This year opened with some impactful consolidation among TMS vendors, causing market observers to take notice once again of what technological change means and why it matters. Most are left wondering about which vendors are truly equipped to provide the kind of nimble, enabling technology needed for collaborating and innovating across the global enterprise, and which cannot or will not commit to treasury’s changing needs. Vendors that can’t convert to cloud-based SaaS technology or keep up with the increasingly sophisticated needs of treasury, will have a tough time remaining independent. Legacy technology, which cannot provide treasurers, CFOs and CIOs with a sustainable, intelligent, and collaborative infrastructure to support corporate performance objectives, will go the way of the dinosaurs.

While treasury has been steadily evolving, converging forces are now catapulting disruptive change upon this function’s status quo. There are several forces at play that are transforming treasury requirements and the technology necessary to address them. Chief among these forces are the effects of globalisation on the organisation, the burgeoning realisation that all things can and should be seen as risk, and the need for technology that leap-frogs over the limitations that old technology imposes.

As companies continue to expand their global footprint into markets riddled with risk, treasurers are expected to provide strategic guidance in financial performance and risk management. To be successful, they need to be aware and understand the effects of changing domestic and international regulations on cash and hedging activities, and they need the intelligence necessary to articulate their strategies to executive management and the board. This requires that they have global visibility into all risks from operational to financial – across cash, counterparties, debt and derivatives. It also requires a collaborative and interconnected workflow across the enterprise, regardless of function, location or time zone.

One McKinsey report, Five steps to a more effective global treasury, explains that, “The pace of growth and regulation has left too many [treasurers] lagging behind on even core activities in their home markets: cash management, banking, debt and funding, investments, and risk management for currencies and interest rates. Such shortcomings are only magnified as companies expand into emerging markets, where even world-class treasury departments struggle to navigate varied banking protocols and diverse languages and customs—and often lack an operating model and infrastructure to connect their activities, portfolios, and risks.”