You might have already heard that TMS provider Kyriba may be up for sale. Payment provider TIS has also recently announced the acquisition of Cashforce. Indeed, it’s no secret that industry consolidation is a growing trend within the fintech world. In the past few years, TreasuryXpress was acquired by Bottomline Technologies. ION purchased Reval. BELLIN was bought by business spend management platform provider Coupa. FIS acquired payments provider WorldPay. And that’s just the tip of the iceberg.
Volatility leads to uncertainty. There’s no way for customers to know what will happen if their TMS provider is acquired. In some cases, business continues as usual – at least for a certain period of time. In other cases, service levels may drop, product updates may be delayed and certain offerings may be merged with others, or perhaps sunsetted. Even positive changes may come with a higher price tag.
So, what do you do if your TMS vendor is acquired and may no longer provide the service you need? Or you don’t know if the product strategy will continue to fit your business requirements? Working with an independent connectivity provider that offers the pipe and rails behind a TMS or ERP can give you much more flexibility to make those decisions without risking operational disruption.
The threat of business disruption
Often, the trickiest part of changing core systems such as TMSs and ERPs is business disruption. Cash management, visibility, and payments are core to business operations – and companies can’t afford to have these processes out of commission for any length of time. Data migration alone can cause immense issues, but the biggest challenge with TMS changes tends to be bank connectivity.
Bank connections can take months to set up, with significant back-and-forth communications between the parties. Even with the advent of APIs, connectivity isn’t easy. And we can add to that complexity any required format conversions needed to match up the message formats used by the TMS or ERP with that of each of the corporation’s banks.
Who owns bank connectivity?
Some businesses take care of their bank connectivity on their own. But most rely on their TMS or ERP provider to handle the bulk of the work, operating under the assumption that connectivity is a core competency of every TMS vendor. Some TMS vendors do handle connections with FIs on their own, others partner behind the scenes with a third-party multi-bank connectivity provider such as Fides. The problem of portability arises in a scenario only when the corporation wants to change TMS or ERP providers.
Working in harmony
For treasurers who want to keep their options open, engaging directly with a third-party bank connectivity provider – also sometimes known as a treasury aggregator – is an easy win. In some cases, a multi-bank connectivity provider with an SaaS portal can eliminate the need for a TMS or ERP altogether. In others, they work in harmony with any TMS or ERP, providing that back-end functionality.
Working directly with one of these providers enables you to expand your options for connection channels, messaging formats, conversions, sanction screening, and validation. These solutions also are scalable, meaning you can add more banks, accounts, and payment providers as needed.
As Christian Azzopardi, Group Treasurer and Commercial Finance Manager, Hästens, explains: “Having a TMS doesn’t necessarily mean you have connectivity to all your banks. And even when you do have connectivity, the information contained in bank transmissions, and the language used for transmissions is not always the same.” That is where a provider like Fides “adds so much value,” according to Azzopardi.
The Fides Multibanking Suite makes it easy to send messages and payments in any format to any FI anywhere in the world. Fides’ validation and conversion services ensure that information is sent and received in the right format, significantly reducing the need for manual intervention. We work with clients to figure out the best channels for connectivity and take care of as much of the process as each client prefers. And, we connect to the leading TMS and ERP solutions. The Fides Multibanking Suite can even connect to multiple treasury management and ERPs at the same time, providing the flexibility and portability needed to support change.
Head of Sales & Partnerships, Americas, Fides Treasury Services
Prior to joining Fides, O’Toole worked for open banking platform provider Trovata, cash forecasting provider Cashforce, and Openlink Financial (now part of Ion Group) where he assisted in the establishment of the global treasury solutions group. O’Toole holds a BA in Economics and a Master’s in Political Science from the National University of Ireland, University College Dublin.