What’s on International Treasury’s radar screen.
This week’s editorial discussion brought forth a variety of topics as well as takeaways to explore from recent meetings of NeuGroup peer groups. Ideas ranged from the question of whether to rely on your treasury workstation to provide the full-suite of treasury-related functionality, or focus instead on choosing market ‘best of bread’ software that would be built to integrate into your TMS, to opportunities (and risks) in China. Also discussed was a revisit of whether to use bank portals for treasury management or go with third-party vendors.
TMS, Best in Class Offerings and Bank Portals
At a recent NeuGroup Global Cash and Banking Group meeting, cash managers discussed the merits of relying on their treasury workstations to provide a full-suite of treasury-related functionality that would link directly into the company’s ERP system for tools to help in FX management, investment management, bank account analysis, or alternatively, going with third-party software that is targeted to one of those functions and bolting it onto the treasury workstation. This could be a company-by-company situation where “results may vary.” But ultimately, what treasury is going to weigh is how seamlessly any of these avenues will integrate to provide straight-through processing and enhanced data analytics.
An age-old topic for the corporate treasury space is how seriously to take the treasury management system offerings of one’s relationship bank. What is of interest is why banks continue to invest in web portals and the role these portals play vs. TMS products and other third-party bolt-ons such as FXall. They all have their place in the market, but for those where all options are viable solutions, it is interesting to note what drives the decision to one over the other and what drives banks to continuously invest in development of their online products as? TMS’s vendors move down-market. Clearly, one motivation is to get more imbedded with the client making it harder for the client to move away.
China Opportunities
China was a big theme at the EuroFinance meeting in Switzerland October 6-8. A variety of experts discussed the macro environment as well as the opportunities and perhaps more importantly, the risks of doing business there. China, of course, has been a hot area of growth for western MNCs over the past several years (along with fellow BRIC-ers Brazil, Russia and India). And with China rapidly evolving in both economy and regulation, it will continue to be. China’s burgeoning bond market is also something many companies have taken note of.
Third-Party Trading Portals
In a related vein are reports of a lot of interest in Europe in MyTreasury, a company that purports to be developing a one-stop trading portal for Money Funds, CDs, CP, Repos and FX. Its goal is to give treasurers a “complete view across the whole market for each instrument.” One interesting feature is that the money fund option is based on clients having direct accounts with the fund companies as opposed to the omnibus offerings from companies like ICD. Further, the product is fully compatible with the large TMS products such as SunGard Quantum and IT2.