It seems that change is in the air for many corporates. Indeed, a recent Treasury Dragons event demonstrated that there is a healthy appetite amongst corporates to move to another core system or banking provider. With one poll showing 65% of the audience of over 100 corporates are considering moving on, the problem of how to do so without becoming enmeshed in convoluted and protracted RFIs and RFPs could be the reason they are only thinking about it.
It’s not just the time and the cost – and the need for in-house expertise – that have intervened. In the current lockdown world, bankers and TMS vendors will not be able to visit corporate premises for the foreseeable future. Discussions, explorations and presentations are not as easy as they once were.
This, says Padraig Brosnan, CEO, Treasury Delta, adds to the inertia that he feels is prevalent in the corporate space; the desire to change exists but the practicalities of change are such that many keep pushing it to one side as other, more pressing, demands arise. From a corporate perspective, by avoiding the issue, he believes that “many are potentially missing out on the latest tech and banking solutions that are available in the marketplace”.
Brosnan is a former banker and corporate treasurer. He fully understands that the RFP process is massively time-consuming. Once the document is despatched to potential providers, most will come back with enquiries and clarifications. Handling this alone takes up a lot of treasury bandwidth. “Treasury Delta is striving to eliminate as much pain out of the process as possible using a digital solution.” By digitalising the corporate treasury RFP, he says it makes the connection between corporates, their advisors, banks and technology providers, “easier, more transparent and quicker”.
In simplified practical terms, each user-configurable corporate request made via the platform contains structured data, agreed timelines and an automated workflow for all respondents to follow. All subsequent queries and final responses are submitted via the platform in order to commence the analysis and evaluation within what he describes as a “treasury ecosystem” environment.
The bottom line is that corporate users are effectively outsourcing the vast majority of their RFI/RFP work to the Treasury Delta platform. In doing so, they are imposing a rigid project management structure over the process. For both sides of the transaction, Brosnan says corporates and vendors will be saving significant time and money as the process is “more streamlined and simplified” for all parties. For the corporate, this should make submissions, amendments, proposals and decisions involved in any change more ‘doable’ than ever.
Currently Treasury Delta’s platform is targeting UK and western European €500m+ corporates, international banks and TMS vendors. The intention is to focus on this market segment, getting the model working for all parties before moving down the value chain, opening up the platform to mid-sized corporates, and eventually the SME marketplace.
One obvious issue that providers could raise is the ease of change which the system purports to offer. Do they really wish to support a system that makes it easier for their corporate clients to move some of their business?
Firstly, notes Brosnan, the platform will make it simpler for treasurers to understand if there is a business case to even consider changing a bank or TMS vendor. This, he believes, should consolidate not impair the relationship. Secondly, whilst a provider may lose some of a client’s business as a result, it can also just as easily gain it.
The design of the platform also means that banks will be picking up a lot of data on a client’s overall wallet-share, which in turn may lead to new ancillary business. This real-time data and market intel is important for banks and TMS vendors, helping them to better understand the value of each relationship. “But the real benefit for banks and TMS vendors is around operational efficiency. By having a single platform for all stakeholders involved in the process, it saves a lot of time and hassle.”
Although the overarching RFP process adopted by the platform can be rigidly structured (including its timelines and access rights), and the look and feel of the process and the “customer journey” will be similar each time, its commercial content format is customisable according to individual corporate criteria.
As a digital solution, each step is also auditable for corporate governance purposes, the final evaluation table offering weighted quantitative and qualitative evidence of each provider’s suitability. That said, Treasury Delta’s primary role is a facilitator; it does not get involved in the analysis and evaluation stage. Although some corporates may feel they have the in-house expertise to be able to manage an effective RFP unaided, one of the routes to market for the platform is through collaboration with treasury advisory firms and associated channel partners.
During on-boarding, a corporate client will be provided with a bespoke and secure ‘sandbox’ version of the platform to explore. Depending on the transaction it is going to market with, Treasury Delta will configure the solution as required before going live, with the client also deciding which banks/TMS vendors it wants to participate for each particular RFP.
Treasury Delta has executed a number of corporate transactions to date, with more in the pipeline. Ultimately, Brosnan sees all parties – corporates, their advisory firms and banks/TMS vendors – working together on these transactions. “Collaboration is our core theme, enabling these transactions to take weeks not months,” he says. With such an incentive on offer, he says “we don’t see corporates using our platform as a one-off tool for just cash management or a TMS; it is our intention to build long-term relationships”.
Using the platform could prove to be an easier and more transparent way for treasurers to satisfy their Board’s corporate governance requirements. Given all the recent advancements and investments in technology by banks and TMS vendors, Treasury Delta appears to provide a pain-free opportunity for treasurers to begin exploring new options and at last make the changes.
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