After testing the concept with corporate treasurers and through direct conversations with banks and software vendors at SIBOS earlier in September I am confident to anticipate that Treasury
information Management System (TiMS) is the new frontier for treasury management systems (TMS).
In my perspective a TiMS does not replace a treasury workstation but it integrates and extends the traditional operations-driven functionalities (e.g., internal data control, reconciliation, and reporting) of a TMS with added features.
To assert that TiMS is moving from the conceptual into the factual stage the descriptions of the TiMS “ecosystem” applications that follow are included with examples and names of TiMS-like solutions already available in the market today.
- eBAM metadata. In a TiMS the eBAM application captures metadata when opening the account (e.g., country of the bank; cross-check with domestic regulations) and alerts whether, with that account, a certain treasury operation (e.g., notional pooling)
is permissible. The technology that makes this possible can already be found in anti-money laundering (AML) and fraud prevention applications which detect anomalies within the context of the transaction.
- Liquidity management support. While yield remains important, treasurers want to know whether an action they take will ensure the company can continue to operate its core business regardless of what might happen in financial markets. Similar to the
systems used by fund managers and capital markets (e.g., Calypso; Murex), this TiMS functionality would assist treasurers in making the right decision for their liquidity, by showing online–without having to access another system as it happens today- all the
available options (and risks and returns) in all major asset classes: foreign exchange and money market; fixed income; interest rate derivatives; FX derivatives; credit derivatives; equities and equity derivatives; commodities and commodity derivatives; structured
- A regulatory ‘spellchecker’. If a payment or an invoice is sent via the workstation, this feature will understand what the payment is about and let the treasurer know if there are any regulatory rules that need to be complied with. Also, if something
is missing in the data, instead of simply alerting that there is a mistake it will autocorrect where possible or provide assistance if it would be deemed too risky to let a software make automated decisions that impact regulatory provisions. The market already
presents security compliance IT services based on constantly updated online legal repositories (e.g., Trustweaver).
- Bank relationship management (BRM). Treasurers will be able to understand if they get preferential conditions from their banking partners based on the business volume generated. There are in the market BRM applications (e.g., Vallstein; Suntec)
that already make this a reality.
- Cash flow simulation. Rather than just basing cash flows on the payables and receivables in the accounting system, further decision support would benefit the treasurer if also manufacturing and purchasing plans should be captured. Customizable integration
with corporate ERP systems is the foundation of existing TMS (e.g., Sungard; Misys; IT2) already providing the capability.
- Key performance indicators. As the treasury function is gaining more relevance and importance it becomes as well important to measure and assess the performance of the treasury in terms of how they are bringing value to the company. Rather than
being a cost centre, treasury should look to use key performance indicators (KPIs) in the creation of a value centre.