By Bryan Richardson
IT2 makes Treasury 3.0 come to life in version 8.0, that it says looks, feels and functions like no other treasury management system on the market.
We have heard consultant Treasury Strategies describe the next evolution of “Treasury as 3.0,” where organizations, having grown up considerably through the financial crisis should be taking on a new level of strategic importance in the company. What that looks like can take many forms. But IT2, one of the premier treasury management system (TMS) developers has released its latest version—Version 8.0—of its product that should give some momentum to that evolution.
Referred to as “Reimagine Treasury,” V8.0 is loaded with not only new features, but an entirely new approach. Inspiration for the new version began about a year ago at a client user group in London where IT2 surveyed participants seeking an answer the question, “How do you see yourself working in the future?” The outcome of that survey and user group meeting was the genesis of a new TMS that looks, feels and functions like no other treasury management system on the market.
User groups like the one in London affirm what IT2 and others already know, which is that treasury continues to be a tough discipline to master. While interest rates are low, access to credit is more challenging; counterparty risk is much higher on the radar, regulatory requirements such as FBAR are increasing, and investment returns are next to nothing, to name a few. All this means treasury groups struggle under the weight of these issues and TMSs need to keep up with all the dynamic variables to not just report data but to provide meaningful and actionable intelligence.
Touchy-Feely tech Trends
Electronic devices are increasingly driven by touch technology to the point where it is common and intuitive to most people. “The big exception is in the workplace,” notes Paul Higdon, IT2’s Chief Technology Officer. “But we are expecting that to change next year as all hardware providers are putting touch enablement in their products. We are also seeing a big migration toward tablets and expect to see more tablets sold next year than desktops,” Dr. Higdon notes.
In developing V8.0, IT2 collaborated closely with Microsoft in order to align the look and functionality with Microsoft’s forthcoming Office 2013 and Windows 8. These products are heavily graphics centric, using a feature called “live tiles” to depict “wall-to-wall content,” in Microsoft vernacular.
A TMS that looks, feels and functions very differently from anything else in the marketplace.
According to Dr. Higdon, this approach follows the one used by city subway systems for graphically directing user behavior. Having built these forward-looking features into its latest version, Dr. Higdon believes IT2’s latest product update is the first business application that is touch-enabled.
Making Treasury Mobile
In light of the consumer trends of moving from laptops to tablets, IT2 believes this also will evolve into the treasury workplace. Anticipating this trend, the company has included complete interoperability of V8.0 across laptops, tablets and smartphones. “Version 8.0 takes away the constraints of being tied to your desk,” said Dr. Higdon. Of course, one of the key values of a tablet or smartphone is the combination of functionality and mobility. Adding full business applications to these devices removes geographical and logistical constraints to remote management of treasury. According to Dr. Higdon, this is another first: “We believe this is the first TMS that has been designed to be fully functional on a tablet.”
High IQ Dashboards
Of course a TMS should be much more than pretty and mobile. It has to get the job done. In the survey of the London group, IT2 wanted to know what clients really needed from systems and weren’t getting today. The answer was that treasury had to be more than just churning transactions and reporting data. It needed to be able to convert this data to intelligent decisions, and easily.
With this direction, the IT2 development team included two broad goals. First, go beyond function and execution and transform data to intelligence, and second, do it as much as possible within the confines of the company’s guidelines and policies. The outcome was a system that doesn’t just stop at reporting data you need to know, but goes an additional step to tell the user what is needed to improve a position or get back into compliance, even before an action or transaction is completed. As an example, Dr. Higdon notes that prior to a trade, the system will look at your positions with all counterparties, factor in risks of those counterparties such as ratings and CDS spreads, and inform you of your exposures and risks prior to executing the transaction.
The product includes built-in dashboards that report on the traditional treasury activities and positions such as debt, investments, interest rates and FX. But in addition to these, the system maintains a database that can also track and report on treasury key performance indicators (KPIs) such as rates of cash visibility, straight-through-processing and auto-reconciliations of key accounts.
On the Ground or in the Cloud
Most TMS providers offer multiple delivery options including software installation on client servers, hosting the software on your own server or at a vendor’s site, or in the “cloud” on a third-party server. IT2 offers all three and has also collaborated with Microsoft in this area as well as utilized the software giant’s Azure cloud product. Further, Dr. Higdon points out that the cloud option is the most economical due to a lower total cost-of-ownership model. Many firms have resisted the cloud environment citing security concerns. But Dr. Higdon dismisses these concerns noting the cases in which cloud security is likely better than a company’s own security.
Can IT2 Crack eBam?
Then there is eBam. Both banks and corporates want it. But it has proven to be a long, hard and elusive slog to get enough players on board with standards and processes that will ease the misery of bank account administration. IT2 is hoping to be the first to take a client from a pilot to a live, multi-bank environment.
Building a seamless “plug and play” capability for eBam.
They have built specification profiles for the different major banks as well as the few intermediaries out there competing for dominance such as IdenTrust and SWIFT’s 3SKey service. “The industry is divided and each has compelling arguments for why their models are the best,” Dr. Higdon said. “But we have built a seamless ‘plug and play’ capability for eBam which we hope will help speed the evolution of this activity.”
Controlled Launch
Version 8.0 is currently in a controlled launch through the company’s “early adopter program,” notes Dr. Higdon. But what is out there has been fully tested and is fully functional to clients, including seamless integration with common bolt-on products such as FXall and Bloomberg. IT2 expects the new version to be marketed fully by early 2013. “This product is really re-synching the way treasuries are working. It allows them to be more efficient, effective and confident in what they are doing and from anywhere anytime,” Dr. Higdon said.