Industry trends in treasury software.

Author:Cameron, Melissa

Over the past few years, enterprise resource planning (ERP) vendors have invested in expanding and deepening treasury functionalities. In turn, these solutions have become more viable contenders in requests for proposals for treasury-management systems (TMS).

Despite these investments and continued improvements in ERP-based treasury solutions, the specialized (or standalone) TMS continue to be the most frequently adopted solution to address the needs of treasurers.

ERP-based solutions have distinct benefits around ease of data availability in a single system, and can--for example--allow for reduced complexity of integrations for cash positioning, cash forecasting purposes. But the TMS is considered by most treasury departments to provide better quality treasury functionality compared with ERP-based solutions.

Overall, the adoption rate of TMS appears to be increasing. That could be because the industry is starting to see the impact and benefits of the application service provider (ASP) or software as a service (SaaS) offerings, which make it possible for treasury departments of smaller companies to implement a TMS.

A few years ago, the investment arms of corporations and larger treasury departments were leveraging risk-analytics solutions to compliment the TMS for more wide-ranging limit management, risk analytics and portfolio-performance measurement. With the increased risk level--and the deteriorating situation in the financial-services industry--more firms have invested in ASP-type risk analytics solutions provided by risk-system vendors, investment banks and custodians to complement their risk-analytics capabilities at a lower cost than the traditionally deployed risk-analytics solution.

Cash and Liquidity Solutions

Solution providers that have historically focused on companies' cash and liquidity-management needs are investing to become integrated TMS providers by expanding into areas such as foreign exchange, debt, investments and financial-risk management. A cash-management solution is often adopted as a means to provide a cost efficient and standardized reporting of bank data, cash positions, cash forecasting and settlement of treasury payments.

With the adoption rate of SWIFT (Society for Worldwide Interbank Financial Telecommunication) bank communication on the rise, and more corporations revisiting bank communication strategies, it is likely that banks, SWIFT and SWIFT partners will continue to broaden solutions offered to...

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