But API readiness still varies by bank and technology provider, creating a general lack of global standardisation and maintaining demand for channels such as SWIFT. In addition, the buyer will still be working with multiple suppliers for installation, integration and ongoing product support cautions Ken Lillie from treasury consultancy Lillie Associates.
“Every system project and requirement definition is different, so corporates need to complete a thoroughly researched requirements definition,” he says. “They should also look at the market to see what products are available to meet those requirements – including TMS and standalone – examine each option for functionality and efficiency, and compare the overall price and ongoing cost of ownership.”
When asked whether the lower cost of using an all-in-one system outweighs any compromise involved in using systems that don’t deliver all the required functionality at a time, Khurmi says corporates need to balance total cost of ownership against functional fit.
“The use of multiple solutions is often assumed to be more costly and cumbersome, although recent developments – such as SaaS cloud deployment, single sign-on and the use of APIs for data integration between systems – means this may no longer be the case,” he says.
Additional considerations in the choice of approach include training requirements, user experience, vendor support and relationship management. “These are all areas that are adversely impacted when using multiple platforms, so it is important the benefits of enhanced functionality outweigh these factors,” adds Khurmi.
In some cases it makes sense for TMS vendors to expand functionality, for example in areas such as cash forecasting where ION Treasury has applied machine learning to its treasury forecasting capability. In other cases, providing integration with specialised solutions will be the preferred option, such as if a company is looking for greater automation of its investment activities.
Specialised solutions put pressure on treasury management providers to strengthen their own functionality in those areas, says Steve Wiley, Vice President of Treasury Solutions at FIS.
“In evolutionary terms, treasury management systems which have received continual investment over the past 20 years have evolved to a point where they can do most or all of what specialised or best-of-breed solutions can do,” he explains. “Newer treasury management systems struggle and are forced to partner with ecosystem players to establish stronger integration.”
Treasury management providers are focusing on both building and partnering according to Tracy Kantrowitz, Vice President of Market Treasury at Bottomline Technologies.
“The concept of an all-in-one treasury solution was a nice idea decades ago but that model and strategy is no longer scalable,” she suggests. “Treasury management system providers must invest in both core treasury functionality and digital services that allow them to integrate and cooperate with other solutions.”
Treasury management systems need to support wider functionality as the market trend amongst banks, TMS providers and fintechs is to aggregate and consolidate financial services offerings with the systems used to support the business, adds Eric Aillet, Product Manager Fusion KTP at Finastra. “The distinction between each will reduce over time as the value chain is consolidated,” he says.
The trend for fintechs to develop solutions focused on specific treasury functions might suggest that treasury management systems need to offer wider functionality, but that is not the only factor in purchasing decisions. Hines concludes that a corporate might choose a standalone component because of its lower cost of ownership.