Banks require a treasury management system (TMS) that can effectively help them navigate the fast-paced banking and financial markets of today. While many older systems remain potent, modern cloud-based solutions managed by specialized Software-as-a-Service (SaaS) providers are now seen by many financial institutions as the way forward.
Below are six serious issues that your bank may resolve by investing in an updated TMS solution.
1.) Frequent Downtimes
If your bank still primarily uses its own onsite servers for hosting its TMS, chances are that an upgrade is in order. A cloud-based treasury management system maintained by a reputable SaaS provider will consistently provide higher service levels compared to most onsite systems. This is especially true of current generation systems, as these have ironed out the reliability issues of previous generations.
This reliability has much to do with the comparative scale and specialization of in-house and SaaS finance IT teams. Quite often, in-house finance IT teams may not be able to spare the time needed to maintain a locally hosted TMS on top of their other tasks. By contrast, SaaS teams can be more focused on maintaining their cloud servers, which tends to result in fewer and shorter downtimes, faster issue resolution, and better service levels.
2.) Over-Compartmentalized Data
Today, most large organizations are moving away from compartmentalized data silos to a single source of truth (SSOT) data model, which promises to bring more data transparency and enable more kinds of advanced process automation. To transition to an SSOT model, a bank’s different systems should be able to integrate seamlessly.
Choosing a TMS that integrates with other existing and future systems will not only help the bank reach this data management ideal but also help its treasury management efforts directly. Some scenarios where an integrated TMS may be useful include the following:
- Linking the TMS to the bank’s marketing or resource planning software can help the system’s AI modules make better forecasts based on market movements and client behavior.
- Issues with deal discrepancies between the dealing room and the back office can be automatically resolved with these systems.
- Accurate TMS reports can be generated on demand without the need to request data from the bank’s various business units.
3.) Cumbersome Data Presentation
Newer treasury management solutions come with powerful reporting features that enable users to generate highly accurate customized reports with confidence. Being able to generate reports in minutes rather than in days or weeks can provide your bank with a major boost in its situational awareness and agility, helping it to outperform competitors.
4.) Outdated Compliance Features
It can be tough to keep up with all the new corporate banking regulations and standards that come up every few years. This only becomes more difficult the older your bank’s TMS solution is. Unfortunately, failure to comply with regulations can result in fines, raising the cost of doing business and potentially jeopardizing the bank’s reputation.
Fortunately, upgrading to a new treasury management system managed by a reputable SaaS provider can help ensure continuous legal compliance. Having the SaaS provider handle some of the compliance requirements will not only save time, but it will also minimize the fines that would otherwise have to be paid.
5.) Low Efficiency
New TMS solutions iterate on previous generations. This usually means that they are almost always better at what they do, which is to save institutions cash in their daily transactions. This is even more true when comparing current cloud-based software with previous generations of locally hosted TMS.
In addition to having better functionality, contemporary TMS systems can also leverage more advanced AI and machine learning capabilities. These can be used to make more accurate predictions about the institution’s cash position against money markets, over time. These more accurate forecasts can help consistently reduce risks and enable the bank to save even more cash on each transaction.
6.) Rigid Processes
In contrast to many older systems that had limited customization options, most newer cloud-based TMS solutions can be tailor-made to fit the requirements of each organization. This essentially allows organizations to configure the TMS to better match the needs of the expected users.
Though seemingly unimportant, customization can be a way to further improve the efficiency of a bank’s TMS solution. Customizable systems can reduce the time to complete processes, reduce error rates, and bring down the cost of training users. In addition, customizability can allow the bank to pivot to new business models without having to update the entire system.
Upgrading your bank’s treasury management system is a necessary step for saving cash reserves and helping it maintain its competitive edge. Though most TMS products should be able to do the job, the high value and transaction quantities typical of banks mean that decision-makers should choose their treasury management system carefully. By learning the benefits of newer TMS solutions, you can get a better idea of which product might be best for your bank’s needs.