Treasury management systems face a tech upgrade
All-in-one TMSs are not about to disappear, but with fintechs developing solutions focused on specific treasury functions, using more than one platform is a viable option.
The traditional treasury management system (TMS) is not the only option available for companies looking to strategically upgrade their treasury function.
Indeed, the established model of using a single system is under threat from corporates using multiple standalone components. Treasuries today face a host of issues that cannot be resolved by a traditional TMS.
This has led to TMS vendor market consolidation, a driver for which is that greater scale supports the ability to deliver niche capabilities on top of the core solution. However, the accelerating pace of technological advance is driving lower-cost, specialized solutions.
Two notable trends have emerged, according to Andrew Hollins, director of corporate treasury proposition at Refinitiv.
“On the one hand we have seen growth in cloud-based, full-service TMS solutions targeted at mid-sized corporates with standardized capabilities and the absence of customisation,” he says. “On the other hand, it is apparent that larger corporates are examining their deployed TMS spend far more rigorously.”
Treasurers don’t want the burden of integrating multiple standalone components
There are two sides to the expansion trend: TMS providers expanding their functionality to adjacent spaces – for example, Kyriba supply chain finance; and adjacent players expanding their functionality into TMS, such as HighRadius receivables automation and Coupa payables automation offering TMS features, or Axletree Swift service bureau offering treasury automation.