Treasury Cloud Offerings Grow

November 8, 2013

More and more companies are taking their treasury management systems to the cloud as offerings grow. One morning the cash-management function of XYZ Inc.’s in-house treasury-management software freezes when trying to open a data file sent by one of its banks. A call to tech support isn’t much help; they say call the bank to find the error’s cause. Turns out it was the bank’s fault; nonetheless, it took a treasury staffer much of the morning to go over the technical details with the bank rep, taking the staffer away from monitoring the company’s critical cash positions.

Jeanne Castro Schmidt, president of Treasury Management Solutions, a CA-headquartered provider of treasury consulting services, says the above scenario of IT pushback has become all too common lately. She added that some large companies often use 70 or 80 software systems, but IT staffs’ core emphasis tends to be a firm’s core enterprise resource planning (ERP) software. “They just don’t have the time to become experts on all the various systems, so they’re going to push back on the treasury group to troubleshoot the IT-related issues concerning their treasury software,” Ms. Schmidt said.

Likewise, many companies, even large ones, still rely on people-intensive and error-prone Excel spreadsheets for many of their core treasury functions. Treasury departments pursuing either approach represent a large potential market for cloud-based TMS solutions, and established vendors as well as newcomers are salivating over the prospect.

Constant catch-up

Application service provider (ASP) solutions developed in the 90s over the Internet greatly reduced the need for inhouse IT support. However, software vendors still had to upgrade each client’s system individually. And then came the cloud. There is nary a treasury management system (TMS) provider today—whether major vendors including SunGard, Wall Street Systems, Reval, GTreasury and Kyriba, or smaller providers—that doesn’t offer some type cloud solution or have plans to do so soon. Those solutions, however, vary significantly.

Cloud saturation

SunGard and other long-time providers of TMS software installed on clients’ computers now tend to offer at least core treasury functions, such as cash management, payments and FX, through the cloud. SunGard plans to offer 100 percent of its TMS software via the cloud, including hedge accounting, risk management and other more complex functions soon.

“SunGard has collection of products that we’ve had for many years and that we’ve grown through acquisitions,” and migrating them to web-based technology, so they can be deployed in a software as a service (SaaS) environment, says Paul Bramwell, SVP of treasury solutions for SunGard AvantGard. “That process takes time, but we already have many customers leveraging the cloud.”

Other vendors, with Kyriba probably at the forefront, built their technology from scratch to function via the cloud. And newcomers to the treasury systems arena, such as Treasury Curve, are using the scalability provided by the cloud to leverage technology they see providing specific advantages over competitors.

Treasury systems vendors are rushing to the cloud because they see most clients inevitably heading there for a slew of reasons, including cost optimization, regulatory compliance needs, easy implementation, quick upgrades, and ready access to data.

Anyone, anywhere, anytime

Cloud-based financial applications provider Coupa Software has sold its cloud-based spend-management software to major companies including Reebok, Subway and Toyota, and so it is well acquainted with the benefits of the cloud. The fast- growing company, which sells globally, has started using Treasury Curve’s money fund portal, one of 40 or so cloud-based applications it uses for functions ranging from ERP to customer relationship management (CRM).

“As far as a treasury product in the cloud, it’s a lot of the same things we talk about with our customers,” said Mark Verbeck, chief financial officer at Coupa. “Such as how a cloud-based application can be accessed by anyone, anywhere, and the investment [that companies providing cloud services] make in their security far outweighs what people can reasonably do internally.”

But at a cost

A big part of cloud cost savings stems from the software provider’s ability to change and update the software simultaneously across clients.

To do so, however, has required the offerings to have a higher level of standardization, resulting in companies getting less ability to customize reports and other functions to more closely match their business processes. In some ways, that need to standardize may be a blessing, given the massive consolidation the TRM industry has experienced in recent years and the resulting poor service from vendors as they try to support a hodge-podge of applications.

“The cloud may help, because if you have everything up there, vendors will have ready access to your system,” Ms. Schmidt said, adding, “Their support people should be able to help with configurations and troubleshooting more quickly, and with more knowledge than your internal IT group.”

Ms. Schmidt noted, however, that cloud solutions can have their drawbacks. For one, the control over customization they give users may be limited. She said one of the most common uses for a treasury workstation is daily cash position reporting. A vendor may allow limited customization for grouping accounts and formatting worksheets, but a company may prefer advanced customization to achieve more dynamic control over the types of reports that can be created and their look, feel and functionality.

Another drawback, she said, is that companies often want data from their treasury workstations to flow back to their ERP systems, and that may require additional IT work to set up an interface for retrieving data out of the cloud and sending it back to the company’s server.


Bob Stark, vice president of strategy at Kyriba, said the firm provides 300 report templates, so one template might provide 20 columns, and the company’s treasury staff can configure reports by choosing only the columns they need plus design elements such as colors.

“If someone wants the 301st template, we’ll create it,” Mr. Stark said. Kyriba’s pure-cloud model appears to be attractive to corporates. The firm reported bookings increasing by 50 percent in the second half of 2012 over the same period the year before, and even stronger growth in the first quarter; the firm noted bringing on numerous high profile clients including AOL, Time Warner Cable, TRW Automotive, although it has made no growth-related announcements since.

Because SunGard runs its own cloud servers, Mr. Bramwell said, it’s been able to construct a “multi-tenant” environment that provides the benefits of SaaS offering, such as ready access and cost savings, while giving customers a high degree of choice and control. “In terms of the type of payment mechanisms and reporting a company actually does, those type interfaces can be configured by the company,” he said. Treasurers “need the ability to build reports that look appealing and answer the questions“ of treasurers or CFOs. For example, Mr. Bramwell said, TMS systems that are not SaaS-based often integrate the SAS Crystal Reports application, which gives the ability to analyze and explore data more deeply. Mr. Stark said many of Kyriba’s customers have switched over from other TMS systems where they used applications like Crystal Reports for report writing. “With Kyriba, they don’t need to [use it] anymore, because our ‘boundaries’ are pretty large. None of our clients use Crystal alongside Kyriba as a result,” Mr. Stark noted.

Ultimately, treasuries all have different needs and will have to test a TMS software providers’ strengths and weaknesses to determine which product is most suitable. Some newcomers to the space are offering functionality to differentiate themselves from the pack. Treasury Curve, for example, connects directly to SWIFT, instead of requiring customers to connect to the financial messaging provider directly or through a service bureau, often more expensive approaches other TMS providers tend to offer.

“All you have to do is go to Treasury Curve and you get access to all your banks. There are no additional steps and no additional costs,” said Aron Chazen, managing director and co-founder of Treasury Curve, adding that customers of its cash management module can thus reconcile their bank balances in real-time and forecast future cash flows. 

The firm also has a patent pending to use SWIFT to initiate binding orders and settlement instructions via the Treasury Curve, which has offered a portal to select money market funds since 2006. So if a customer wants to buy a money market fund, it can enter the trade on Treasury Curve, which under the customer’s authorization then has the ability to “not only execute that transaction with the fund provider but to actually initiate the money from the customer’s bank to fund the trade, reconcile the trade and enter that data into their general ledger,” Mr. Chazen said.

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