The IT2 team have continued to drive the development of the system in all areas of Treasury Management, through the combination of the latest technology with financial expertise. 6.2 offers new risk management tools, increased financial instrument coverage and improved cash management capabilities. With an increasing focus on the investment management capabilities of IT2, all new functionality is delivered in the framework of IT2's Best Practice workflow management as enabled by IT2's unique workbench, process map and management dashboard tools. This positions IT2 as the best of breed solution for Corporate Treasuries and a range of Financial Institutions.

Release 6.2 increases the ways in which treasurers can gain benefits from their IT2 implementation. IT2 Best Practice solutions enable treasury departments to optimise the value they receive from automation through the integration of treasury policy and process documentation with flexible and secure treasury processing. IT2's libraries of Best Practice management and operational reports, integrations with key 3rd party systems such as banks and ERPs and treasury workflows provide multiple tools to support high value, low risk treasury operations. IT2's powerful and intuitive reporting facilities greatly ease the burdens of management reporting, and support effective risk decision taking.

6.2 offers much to the treasurer. The new risk management facilities supplement the existing IT2 risk tools such as limit management, FX & interest rate exposure analysis and reporting, mark‐to‐market and scenario analysis with powerful new Value at Risk functionality. In cash management, the inter‐company borrowing/lending process is significantly streamlined. Additionally, several new functions support some US specific cash management requirements. The system's instrument coverage is broadened, especially to fulfill the needs of treasuries which are involved with investment management and advanced commodity and financial exposure hedging.

Risk Management

IT2 has leveraged the flexible reporting power of its unique workbench tools to give one of the most powerful Value‐at‐Risk (VaR) reporting solutions available. The new IT2 VaR GUI (Graphical User Interface) offers the maximum degree of transparency, flexibility and drilldown capability. This means it is a straightforward task for risk managers to validate and prove the calculations that underlie their VaR numbers.

The VaR enhancements include graphs that show VaR evolution over time, for each currency and on a consolidated basis. Cash flow mapping is enhanced to a
high degree of accuracy, in which the impact of cash flows which fall between two yield curve points is mapped to those points. The Treasurer may evaluate risk using diversified and undiversified VaR as required by their judgement of market conditions.

Furthermore, users are now able to generate their own volatility and correlation data, giving a greater degree of client control over the information used for VaR derivation ‐ and achieving considerable cost savings for the supply of this data.

IT2's option pricing functionality is also enhanced to include full support for equity options (plain vanilla and barrier) and interest rate barrier options. This enhancement includes revision of the implementation of the Black‐Scholes, Rubinstein‐Cox binomial tree and Fischer Black option pricing models to accommodate European and American style options. The pricing tools in IT2 have been further improved, with the addition of intuitive, visual support for Front Office risk management operations. A new graphing capability enables users to evaluate option scenarios with displays of values such as Spot Rate versus Premium, Option Price versus Spot Rate, and Gamma versus Strike, to support easier risk evaluations and decisions.

Cash Management

The Inter‐company Lending solution in IT2 version 6.2 is streamlined and simplified to enable a more efficient workflow to be followed. The solution is now more flexible, and is supported by a high level of automation to make inter‐company loan administration easier to operate. Principal increases and decreases and early maturities are performed through straightforward system operations, and the principal and interest diaries are visible on a consolidated screen. The reset process is automated. IT2 now automatically recalculates all values when loan parameters are changed.

A new loan overview provides a very clear summary of the any loan in IT2. The new screen shows the outstanding amount, the current rate, the accrued interest, and interest and fee payments for each date, all on a single screen (as shown below). IT2 also manages the processing of ad‐hoc loan repayments or drawdowns in a much more efficient way, according to user defined rules. It also now supports the automatic recapitalization of interest, and the partial repayment of accrued interest.

Further significant advances have been made to the daily cash management functions within IT2. After a detailed review of requirements of the North American cash manager, a suite of new functions has been introduced which elevate IT2's cash management capabilities and will improve cash desk operational efficiency on a world wide basis.

Firstly, cash bucket categorization is now standardized throughout the daily cash management cycle. There is now a shared reference framework from the initial cash forecast buckets, to the wires (payments) that are initiated from the system. This framework is finally reflected on the reported transactions (bank account entries) reported by the bank. This consistent categorization allows for very powerful analysis on the new forecast versus actual workbench. Reporting and analyzing forecast accuracy by entity, currency and category is provided out‐of‐the‐box in version 6.2 of IT2, adding a further Best Practice solution.

A new reconciliation function automatically categorizes the reported transactions according to predefined rules. These rules allow for automatic searching for key text within the transaction detail; this was previously a manual task, or had to be built into the interface. IT2 version 6.2 includes screen based reconciliation rules; these may be easily revised and updated by the cash manager in order to optimize the process and minimize the number of
exceptions. New actions are now available which streamline exception processing: the remaining exceptions may either be transferred automatically, or they may be updated manually directly from the reconciliation workbench.

A new approach to cash accounting provides simpler set up and maintenance of the journal rules. The new approach uses the new cash categories and the reconciliation status to drive the determination of ledger accounts, thus linking the accounting very closely to the bank reports (bank statements). This provides a much more controlled cash accounting framework and straightforward exception processing. The solution is fully integrated with the journal creation process for non‐cash items within IT2's Nominal Ledger, which provides full accrual, amortization and market value accounting, and is complaint with FAS133 and IAS39.

Instrument Coverage

In version 6.2, the scope of IT2's front and back office and treasury accounting support has been extended to include the following financial instruments:

• Plain vanilla commodity options.
• Average rate commodity swaps (which will primarily benefit energy and transportation sector clients).
• Average rate commodity options (which will primarily benefit oil and oil service industry clients).
• Interest Rate Barrier Options.
• Support of corporate actions has been extended to include rights issues and stock splits.

The floating rate instrument rate reset functionality is enhanced so that the user may now select an automated default process, to increase accuracy and efficiency by eliminating the need for the manual entry of rates.

Look and feel

As part of the continued look and feel enhancements, IT2 can now be configured to display company logos on workbenches, reports, dashboards and process maps.
Additionally, IT2 NET can be completely tailored to comply with the visual requirements of a corporate intranet. Furthermore, IT2 has adopted the themes of Office 2007 to achieve greater visual clarity in the drill down of data on workbenches. This is further enhanced through greater customisation of workbench themes and layouts.

Compliance

Security in IT2 is further enhanced through the implementation of RSA SecurID® access. Rather than relying on password authentication to validate user access,
using RSA SecurIDs requires the user to be in physical possession of a unique key fob token with a constantly changing code. Only a combination of the user's pin and the current code will give access to sensitive areas of IT2, such as the authorisation of payments or the changing of beneficiary details.

Technology

IT2 version 6.2 now supports Microsoft Windows Vista, and IT2 NET has been upgraded to use the .NET 2.0 framework. These technical advances confirm IT2 Treasury Solutions' continued commitment to supporting the latest technologies.