Treasury management systems uptake plateaus

Treasury management systems uptake plateaus

Treasury management systems (TMS) usage by corporate and financial institutions around the world appeared to plateau at the end of 2002, according to research conducted by Greenwich Associates.

Only 43% of treasury officers at 1369 large institutions interviewed by Greenwich Associates at the end of 2002 report using a TMS, down from 46% of the same group at the end of 2001.

This is in marked contrast from the situation Greenwich Associates found at the end of 2001, when the percentage of users had risen from 36%.

"The case for buying a TMS has become harder to make under current market conditions," consultant Tim Sangston says.

According to the matched sample of 1369 institutions interviewed in 2001 and 2002, those more likely to use TMS include institutions that conduct over $10 billion in foreign exchange volume annually. Average use declines slightly in the $1-10 billion range, and drops to just a third among those conducting less than $1 billion annually.

Half of corporate treasurers say they use TMS, as compared with less than a third of financial institutions. This reflects the fact TMS functions have traditionally been based on the needs of the corporate user.

In terms of geography, institutions in continental Europe report higher usage (54%) than institutions in the United Kingdom (38%). Half of US institutions say they have TMS, compared with 38% of those in Canada. In Asia excluding Japan, the percentage is 32%, and in Japan it is lower than any other major market, at 18%.

"Some people, particularly in the Asia-Pacific region, are opting to use an internally developed system or Excel spreadsheet to keep costs down," says Sangston.

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