But it will be online, on your mobile phone and, increasingly, in the Cloud.
Regulation, risk, a low-interest-rate environment and global economic uncertainty mean treasurers are more dependent than ever before on software systems and services to help them manage their business.
In a climate where banks are withdrawing from certain markets and lines of business, treasurers require greater visibility into their global cash and liquidity across the regions and sectors in which they operate. These insights are invaluable in terms of helping treasurers make better-informed decisions on cash, liquidity and investment management; better manage their banking relationships and build businesses that are more sustainable.
Banks are increasingly under pressure to meet heightened client expectations for real-time information regarding their payments and cash balances and to provide processing capabilities across multiple channels, including Web and mobile, as well as to maintain conventional offerings such as check processing, wholesale lockboxes, ACH and wire transfers. Winners in this year’s treasury and cash management systems and services categories, such as Canada’s D+H Financial Technologies, help banks make the world of multiple payment channels, currencies and back-office legacy systems appear seamless to the end customer.
One of the more notable trends in this year’s awards is the major advances in treasury and risk management systems, which now boast a range of functions: from analyzing and quantifying currency exposures and hedge accounting treatments to providing timely reporting on cash balances, payments, liquidity and investments.
Yet technology has not always been a treasurer’s best friend. Nor has it always delivered the strategic insights and business intelligence that is required more than ever today. In the past, implementing enterprise resource planning (ERP), accounting and treasury management systems were multiyear projects, entailing significant up-front investment and no guarantee of a reasonable return. Treasurers often failed to leverage the full functionality of these applications due to the complexities of systems integration.
But the advent of the Cloud has transformed the way treasurers consume these technologies. Companies no longer need to pay out so much up front to attain higher levels of centralization and control over their treasury operations. Kyriba was one of the early adopters of the Cloud to deliver treasury management software-as-a-service, which enabled smaller to mid-sized treasury organizations to attain higher levels of automation and visibility over their cash, without having to maintain substantial IT dpartments.
ERP providers like SAP and Oracle are using the Cloud to deliver enhanced business intelligence and faster business processes. The Cloud is now extending ERP functionality—once considered to be the preserve of large multinational corporations with complex business processes—to small and medium-size enterprises.
Some system and software providers, like FIS, are supporting the transition in corporate treasury toward real-time work flows, enriched ISO 20022 payment
messages for enhanced reconciliation, predictive analytics and “self-learning”
technologies for credit risk analysis and detecting deviations in payment behavior. Those efforts led FIS to wins for its accounts payable and accounts receivable solutions.
Treasurers are increasingly reliant on technology to help them fight cybercrime and identify fraudulent transactions, as well as potential credit and political risks in their global supply chains. This year’s winner in the corporate cards and expense management category, American Express, provides a range of different reporting tools, online systems and virtual accounts to help card-program managers more easily control spending and spot questionable transactions.
Consolidation is also an overwhelming trend in the treasury management systems and services space. Reval, which is named Best Treasury Analytics Provider, was recently acquired by venture-capital funded ION, which had already snapped up treasury management providers such as IT2, Wall Street Systems and City Financials.
Despite technology’s promise, inefficiencies still exist within treasury and cash management. For example, bank account opening and management are still largely manual processes. Neither widespread acceptance of digital signatures nor banks’ account-opening processes have evolved at the same pace as the underlying technologies that facilitate electronic bank account management, or eBAM.
Undoubtedly, the trend is toward digitization and automation; and this year’s winners in our systems and services categories are all working to help companies make the transition from largely manual, paper-based processes to a highly automated approach that eliminates inefficiencies and unnecessary costs. But given the complexity of the business processes involved, and corporate concerns about cybercrime and risk, the digital transformation of corporate treasury and cash management has not moved at the same pace as in the consumer banking space, where the advent of peer-to-peer lending and instant payments via mobile and other “smart” devices is rapidly transforming how consumers interact with financial services.
In the coming months and years, it will be interesting to see what impact third-party application providers have on systems and services in corporate treasury and cash management. Can they deliver even greater efficiency gains than those achieved by previous technology iterations, making a corporate’s back-end systems communicate more seamlessly with those of its banking providers?
Systems & Services Winners
Best Multichannel Payments Provider
D+H Financial Technologies
Banks today are increasingly under pressure to provide payment processing capabilities across multiple channels (Web, mobile, check, ACH, wire) and currencies. With 8,000 clients in more than 70 countries, Canada’s D+H Financial Technologies provides banks with a wide range of solutions for executing payments globally and domestically, sending payment messages via SWIFT, online payments, Single Euro Payments Area payments, faster or real-time payments and payment hubs for consolidating multiple payment legacy systems in banks into a faster and more streamlined experience for the customer.
Best Accounts Payable
FIS’s payments solution, TRAX Payment Factory, helps treasurers centralize their payment processing and bank connectivity requirements across regions and business lines to give them greater control. Payments from a company’s ERP system are automatically routed through TRAX, with payment instructions sent to the relevant banks via the SWIFT network. This eliminates the need for treasurers to maintain different electronic banking systems and disparate processes for managing payments. TRAX supports the latest ISO 20022 payment messaging formats and is leveraging “self-learning” to detect deviations in payment behavior. It is also able to execute workflows in real time. In the future, TRAX will be able to channel information from third-party banking application programming interfaces developed by financial technology companies.
Best Accounts Receivable
GETPAID, FIS’s solution for credit risk analysis, credit scoring, collections management and dispute resolution, is one of the most comprehensive solutions on the market for managing accounts receivable. GETPAID provides a single overview of a company’s exposure and collections to help companies better manage their collections and gain greater control over their cash by reducing their Days Sales Outstanding. The latest versions of the system include a credit workflow engine for automating the credit review process and predictive collection scoring to determine the probability of whether a customer is likely to pay. Depending on the score, companies can adjust their collection treatment of a customer accordingly.
Corporate Cards & Expense Management
American Express provides a range of solutions that provide visibility into card spend, as well as the ability to better manage and control card payments. Cardholders can monitor card policy compliance using American Express@Work, which provides reports and other online tools for the day-to-day management of corporate card information. vPayment is a virtual payment solution that assigns one-time use account numbers to transactions that enable users to control spending by setting limits and a usage timeframe. The use of virtual accounts can also aid with reconciliation as companies are more easily able to match transaction data with card expense details.
Best Treasury Management Software
In the past, companies tended to implement dedicated treasury management systems that were separate from their enterprise resource planning (ERP) systems. However, the trend these days is to leverage the treasury management functionality that resides within ERP systems, which does away with the need of having to integrate disparate systems. As a leading ERP provider, German software giant SAP has been a major beneficiary of this trend. Its next-generation SAP S/4HANA ERP suite, which leverages the HANA in-memory database and applications in the Cloud for enhanced business intelligence and faster business processes, enables companies that use its treasury module to benefit from better visibility of their cash positions and risk exposures and better alignment of accounts payable, accounts receivable and general ledger treasury functions.
Best ERP Provider
ERP software supports a wide range of financial reporting and accounting processes including typical treasury functions such as accounts payable and accounts receivable, as well as additional functions such as electronic payments, invoicing and financial reporting. A decade or so ago, ERP systems were unwieldy implementations with many companies struggling to realize their full value and functionality. Along came the Cloud, which meant that companies could utilize only what they need with less of an upfront investment. Oracle is a well-established name in the ERP space. Historically, its software has tended to be used by larger enterprises with more complex business processes, but Oracle is also leveraging the Cloud to tailor its ERP solutions to suit small and medium-sized enterprises.
Best Treasury Analytics
Treasury analytics and risk management is Reval’s core business. In recent years it has sought to combine risk and treasury management in a single solution delivered via the Cloud. Its strengths lie in helping corporates manage financial risks pertaining to cash and liquidity, currencies and commodities and compliance with hedge accounting rules. Last October, Reval agreed to be acquired by ION, which with financial backing from the likes of the Carlyle Group, has acquired several of the leading names in treasury management software, including Wall Street Systems, IT2 and City Financials.
Best Cash Forecasting Solution
Treasurers are looking increasingly to leverage the benefits of Cloud-based treasury management applications to gain greater visibility and control over their cash and liquidity. Software-as-a-Service provider Kyriba provides treasurers with up-to-the-minute reporting and visibility of their cash positions across multiple bank accounts. Treasurers can model cash forecasts and measure their effectiveness. Companies like Spotify, which won the International EuroFinance award for Treasury Excellence in 2016, leverage Kyriba software for its core cash, payments and financial transactions functionality.