Treasury management revisits long-term objectives

NACHA is wrapped. Now the spotlight shifts to the other side of the pond where this week the Association of Corporate Treasurers (ACT) kicks off its annual conference in Liverpool. You can insert your own Beatles analogy. Much like the AFP in the US, the ACT is an advocacy, education and professional development group. This year its agenda features discussions on open banking, geopolitical pressures and inflation among other issues.

Those are the hot-button issues and will get their deserved share of play. But for Tom Leitch, Bottomline’s director of sales and business development for treasury, the ACT is a chance for attendees to reconsider their digital infrastructure (or lack of it) and take stock of their current partner roster. We explored that with him as the conference opened.

Bottomline: Tom, I’m sure attendees at ACT have various reasons to learn and interact, but at the core, most exhibitors are in essence asking them to take a close look at their current system for gaps and potential improvement. From your perspective, why should treasurers revisit their current treasury management platform or infrastructure at this point?

Leitch: First I think they should know that to improve it, as you say, you don't need to rip out what you have already. We’ve always said that when revisiting your treasury tech stack, it’s with the goal of improvement and better connectivity. We want our clients to ask hard questions like: Is your current system connected to your ERP? What formats are being received from your banks and from those ERPs? Is there something that we could improve on such as the frequency format? Or are there items that have come up in the last year such as frequency of forecasting for example? Do we need to reconfigure workspaces to accommodate more users or get more data out of the system for those who can’t readily access it? These are the kinds of questions we're prepared to help answer.

Bottomline: It’s a complex technology that is better simplified, we know that. How big is the problem of multi-provider solutions in treasury management? What does it look like when you have too many cooks in the kitchen so to speak?

Leitch: When you have many providers you have many roadmaps. Let's say a treasury department has an ecosystem of five vendors and three are singing the same tune, and two have their own song to sing. Well, then you're sort of hamstrung on the efficiencies you can get from working with the three core providers. A single-provider solution is far more efficient. When you have a single provider, you can commit to one roadmap and you can rest assured that your short-term and long-term future are being served. And I think that's sort of the default difficulty you see. We’ve seen some consolidation in this area since the pandemic and I expect it to continue.  

Bottomline: Are their risks inherent in the single provider approach?

Leitch: Sure, if you engage one that can’t be flexible, secure and come attached with good people to install and service it. A treasury management system should be seen as a ten-year transformation. So, when you bring someone in on day one, think about where you want your business to be in ten years. Corporate treasurers are getting much better at that. A TMS provider should serve many needs. You’re not going to find a unicorn that has 100% of everything you want. A good provider has the ability to open up the architecture to some of the niche players if necessary or add new technology or features later on.

Bottomline:​​​​​​​Tom there’s a good mix of banks and non-financial companies at ACT. Are there major differences between corporate and banking treasury systems? And is that issue even important?

Leitch: It’s important but I think a better question is what are banks doing to retain their corporate clients? One point I'd probably want to get across is that banks are looking at working with TMS providers to give their customers a better experience and retain them. So rather than deliver mediocre treasury solutions, banks are really stepping up to provide better systems with better capabilities. It’s more like a partnership. Banks are taking on better systems. So, they step up cash management so they can extend that to their corporate accounts. Data here is critical. Because as data opens up, banks can't rely upon the services they offered ten years ago. Corporates know more about data and need more from their data and they will demand more of that from treasury management.

Bottomline: ​​​​​​​So, what are two or three things that attendees should take home from ACT? What can they bring back to their day jobs?

Leitch: First, view your vendor as a partner. Ask how they can help your business. And if they say they need to rip and replace to start out with, approach that with caution. Specific to the ACT event, I think treasurers need to look more toward education. Give a potential vendor the plan for your business, and then see if they can help you achieve it. The worst that can happen is you will be smarter about TMS. Because once you understand what you have, or present things that are not working, you're much better equipped to get where you want to go. Know what you don’t know. It’s almost like a corporate therapy session where you’re identifying your good and bad points and then committing to improvement. That’s the approach that can take treasury management to a better place.