Why configurability remains a salient attribute of efficient treasury management systems today

Against the backdrop of unprecedented macroeconomic and regulatory pressures — including the migration to ISO 20022 and the upcoming shift to T+1 settlement — businesses utilising a configurable treasury management system (TMS) are in a better position to navigate the various curveballs thrown at them. However, what are some of the hurdles treasurers need to overcome in order to future proof businesses?

One size does not fit all

Treasury solutions, for years, have been designed for the industry as a whole, without taking into account the various nuances different businesses face. This left finance teams using a rigid TMS with limited options, diminishing opportunities to automate critical aspects of the treasury process. What’s worse, some treasurers are still conducting complex processes manually and losing time on tedious exercises for consolidation rather than adopting a centralised TMS and focusing more time on business-critical operations. This extra time spent comes at an opportunity cost and prevents finance teams from making timely and accurate decisions, based on data-led insights.

Inefficient and fragmented workflows have long been a challenge in treasury management. There’s no reason we can’t now demand integration across multiple financial functions, such as cash management, liquidity forecasting, FX exposure and hedging. Integration must extend beyond the TMS itself, into the treasury ecosystem and across the Office of the CFO, with standard interfaces for the most common systems, like Bloomberg, 360T, SWIFT, ERP, or leveraging open APIs. By utilising a unified platform that enables structured, centralised processes, businesses can maximise the full potential of their treasury teams. A recent survey found that over six in ten finance leaders plan on having half of their duties automated by the end of this year. For all companies, big or small, for this automation drive to have the desired productivity gains, configurable software holds the key to greater operational efficiency.

A trade off?

Despite these advantages, one major concern for any participant in this dynamic, constantly changing financial market, who hears the word ‘configurability’ is: time. The worry for many treasurers is that greater configurability comes with greater complexity in their TMS, and hence means more time taken for deployments, which is the last thing a busy treasury team wants. While it is true that often configurability and complexity go hand in hand, there are certain levels of both that are crucial if the solution is to cope with nuanced business practices.

Every organisation is unique. Without any complexity we would be back where we started, employing off-the-shelf solutions that lack any business-specific capabilities. As such, configurability has become a necessity. For example, by building a solution where each sophisticated component can be upgraded independently, vendors can ensure that upgrades are swift and cause minimal disruption. What’s more, intuitive and modern design can ensure that even a configurable TMS has seamless user-experience that directs users to areas where their attention and action is most required. An added bonus is that the TMS can be scaled as a business grows so that it can continue to deliver efficiency gains as business operations evolve.

Future proof

At its core, configurable TMS allows organisations to adapt to internal and external factors seamlessly, making it the most important trend to watch for in fast-growing businesses in the next few years. In a rapidly evolving financial system with innovation at every corner, staying connected with banks, payment providers and other stakeholders is crucial. In addition, with inflationary pressures at an all-time high, and interest rates in the US at the highest level for over two decades, employing technology that is agile and adaptable has become even more vital to keep up with the challenges economic headwinds bring. Like never before, finance teams need to ensure that business critical tasks are executed accurately and with confidence, even against the ongoing economic backdrop.

Ensuring that treasurers can always keep up with the latest payment innovations and industry standards, whether it’s the newest SWIFT messaging standard and API integrations, or new payment methods such as blockchain-based transactions and digital currencies, is crucial. A configurable TMS platform presents a wide range of options relating to connectivity and can be updated as the payments landscape continues to evolve, allowing treasurers to communicate and exchange data efficiently.

Configurable software has brought about a paradigm shift, enabling large businesses with a multitude of complex processes to implement a single unified solution that caters to their specific needs. The ability to automate even the most complex tasks of a global treasury operation has quietly revolutionised the TMS landscape. It would be remiss for treasury teams to not prioritise having configurability at the core of any system they utilise. In particular, embracing this transformative capability will undoubtedly drive businesses towards continued success in an uncertain and rapidly changing economic backdrop.

Loic Leonard is ION Treasury’s Head of Product for Wallstreet Suite. In his role, Loic spearheads the innovations of products and solutions for the treasury market.

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