TechnologyMerger Mania: Consolidating TMS Vendors

Merger Mania: Consolidating TMS Vendors

The acquisition of IT2 by Ion Group’s Wallstreet Systems (WSS) subsidiary at the turn of the year is the standout deal so far in the consolidation trend that is evident in the treasury management system (TMS) technology sector. WSS seems to be trying to establish a portfolio of TMS brands to rival SunGard, perhaps leaving smaller technology providers such as Kyriba, Reval, GTreasury and others to develop innovative modules, while others pause to integrate. This article looks at the treasury implications of the technology vendor consolidation trend, its historical context and then goes on to suggest what may transpire next. What it means for corporate treasurers seeking to introduce more technology support, automation, connectivity and efficiency into their operations, is also examined.

Ion Group also bought Financial Software Systems, a US provider of treasury management, capital market and wealth management technology, typically used by brokers and fund managers with treasury clients, for an undisclosed sum in January 2013; just a week after
gtnews’ revealed its rumoured £75m acquisition of IT2. WSS already has the Trema, Thomson, electronic bank account management (eBAM) offerings of Speranza, and CityFinancials brands under its umbrella. These latest acquisitions echo the growth of SunGard’s corporate treasury portfolio 10 years ago. A rival group is being born before our very eyes, but will it strangle technology innovation and adversely impact TMS pricing and choice, or merely improve connectivity and integration?

The consequences of this technology trend will no doubt be profound. As Enrico Camerinelli, a senior analyst at Aite Group and ‘gtnews’ contributing editor warned at the time of the IT2/WSS deal the private equity owners of IT2, CapMan, might have made a great monetary deal but done a disservice to the TMS market by causing the removal of one its most active and influential players, which could easily be subsumed into WSS. “It is unclear why WSS would have wanted IT2 for its already rich solution set: on the contrary, WSS had the interest to remove a competitor, an offering provided by CapMan on a silver plate,” he said. “If the deal replicates the earlier Ion/WSS acquisition, IT2’s uniqueness will soon disappear from the scene and the TMS space will suffer a great loss. Advances of solutions in the new Treasury intelligence management systems (TiMS) sub-section could slow down significantly.”

The value of treasury transactions is not in their execution per se, but in the information that accompanies each transaction – intelligence that will one day serve as the foundation of business decisions. Treasury intelligence management systems (TiMS) seek to integrate and
extend the traditional, operations-driven functionalities of a TMS with features that allow better information to generate intelligent decision-making, risk reporting and business intelligence. TiMS require a development strategy however, warned Camerinelli, and that does not always fall within Ion’s tradition of engineer-to-order, customer-bespoke system development.

TMS: The historical background

It is worth examining how the treasury management system (TMS) marketplace developed before speculating about its future and what options might be available to treasurers as the consolidation trend escalates. Corporate TMS’ evolved out of bank treasury systems in the 1980s. Their principal differentiating factors were (and still are) a central focus on cash management, and, outside North America, the
provision of an integral solution for foreign exchange (FX) hedging and some level of support for debt and investment trading.

The advent of networked PCs and of Windows as the corporate technology standard of the late 20th century led to a proliferation of TMS vendors in the 1990s – there were at least a dozen. Most were still owned by their founders back then. The shakeout came as some systems failed to keep pace with technological development, and with the demands of properly accommodating the advent of the Euro, the Y2K
millennium demands, increased treasury demand for SWIFT connectivity for cross-border payments processing, globalisation and other requirements that demanded research and development (R&D) expense. An inevitable contraction followed.

In 1998, SunGard initiated the first wave of TMS vendor consolidation, with the creation of SunGard Treasury Systems (now AvantGard)
through the acquisition of MCM (the creator of the GTM system), and of the US cash management systems Resource IQ and ICMS. The game changer came in 2000, with SunGard’s acquisition of the then TMS market leader, GIS, with its Quantum system. Over the next few years, SunGard acquired Integrity (2005) and Globe$ (2008); forming a technology grouping that WSS now seeks to rival.

In the meantime, Trema stirred into action, acquiring Richmond Software’s Odyssey TMS to broaden its corporate market presence beyond the relatively limited high-end space served by Finance Kit. Trema was itself sold to WSS, which added Thomson’s Treasura and CitiFinancials, before being acquired by Ion in May 2011, and now taking over IT2.

Quantum went on to dominate SunGard’s treasury business for five years after its acquisition, but will the same happen with IT2 and WSS’ TMS business or will it quietly slip away? Only time will time but history suggests it might if – and it’s a big if – treasury client demands, and not internal efficiencies, are the key driving forces behind the move.

Defining TMS and analysing the rivals

A definition is always a good way to ground an analysis, so I’d like to detail my take on treasury management systems. The definition of a TMS used in this analysis is ‘a mission-specific technology system that, at a minimum, addresses cash management, FX, debt and investment and the related treasury accounting procedures. The key TMS vendors that I will examine below – assessing their pros and cons for corporate treasury end users – have all been selected because of their global presence or aspiration, and for the proven applicability of one or more of their software solutions in the global corporate treasury sector.

Enterprise resource planning (ERP) treasury modules, domestic cash management systems, mission-specific financial risk management solutions, and finance systems, such as those addressing reconciliation and the management of account payables (A/P) and receivables (A/R) are excluded for the purposes of this article. The analysis attempts to establish a level playing field for considering the rival technology solutions.

The TMS market is now compressed into a small number of operators with global reach. The TMS vendors considered here are SunGard, Kyriba, Reval, GTreasury and Wallstreet Systems (WSS). These are all relatively long-established companies, and, overall, their products span the treasury marketplace from the largest multinational corporations (MNCs) to companies with an annual turnover of US$100m or even less in a few cases. The clients are all corporates with organised treasury departments. In the lower part of the spectrum, they will – in their management’s judgement – be exposed to a ‘significant’ level of risk, typically in liquidity, debt complexity, or exchange or commodity market exposure.

The use of a TMS is now established as an industry standard operating practice in the upper echelons of the sector as treasuries seek automation, efficiency and connectivity support. It is trending that way too among smaller organisations, as the cost of an appropriate TMS investment is increasingly accepted as an affordable insurance premium, protecting businesses against unacceptable levels of financial and operational risk.


SunGard’s TMS offerings are part of the AvantGard corporate treasury technology suite of solutions. The company also provides broader
finance offerings for account payments and receivables, all of which are designed to help corporations optimise their liquidity management. SunGard offers its own hosting and Software-as-a-Service (SaaS) options for its TMS solutions as well; in addition to providing value-added services such as SWIFT Service Bureau (SSB) on-boarding facilities and corporate-to-bank connectivity options via its electronic financial messaging platform, Echos. Finally, its eBAM and bank fee analysis tools help to differentiate it for treasurers by adding breadth to its treasury solution delivery range.

This analysis focuses on SunGard’s leading global TMS systems, AvantGard Quantum and AvantGard Integrity. Paul Bramwell, senior vice president (SVP) of treasury, for SunGard’s corporate liquidity business unit, emphasises that SunGard policy and practice is to support and develop all the TMS solutions in its portfolio, to ensure that client’s investments in SunGard solutions are never obsoleted.

SunGard claims to be unique in that it offers its TMS clients the choice between installed, hosted and SaaS delivery models, as any of these may be preferred by a particular client’s policy and situation. The vendor continues to invest “heavily” in the staff needed for the development and support of its entire TMS range, says Bramwell, and this commitment is being reflected in significant new releases for AvantGard Quantum and AvantGard Integrity, which address areas including usability, reporting, advanced risk management and regulatory compliance requirements.

Bramwell sees the future of the market as being based upon the “survival of the smartest”, stressing the need for all competitive TMS offerings to keep pace with the market’s strong demand for new functionality in areas such as data, regulation and risk, and for providing a
full range of hosting and SaaS options.


Bob Stark, Kyriba’s vice president of strategy, reports strong business growth, represented by 120 new customers last year and on-going contract wins. The 2013 numbers to date suggest that the firm’s performance may be exceeded this year. Kyriba are emphasising their commitment to broadening the functionality of their TMS offering, says Stark, mentioning risk management, hedge accounting, valuation workflow, back office workflow efficiency, bank account management (BAM)/eBAM and mobility, among the crucial areas of advancement.

The vendor is firmly committed to “true SaaS” delivery, adds Stark, detailing Kyriba’s strategic vision for treasury technology, which
includes continuing improvements in working capital and supply chain finance management tools, and aiding treasurers need to increase the yield earned on surplus cash by better data provision. He observes sustained demand for automated BAM as an immediate treasury need, as the real drive towards eBAM is still ahead. Automated BAM alone brings significant treasury gains in the control of cash, account signatories and operating efficiency.

“The recent TMS industry consolidation is also great for Kyriba,” claims Stark. “IT2 seems to have gone away for now, and the TMS market is booming as companies are entering it for the first time, or are now looking to replace outdated technology.”

Kyriba sees today’s TMS market floor to be a corporate annual turnover as low as US$100m, furthering opening up the market to non- MNCs and ensuring vendors need to be very efficient, in order to offer attractive pricing.


Reval’s information disclosure is presently restricted in accordance with US Securities and Exchange Commission (SEC) regulatory requirements, associated with its filing to go public, but they are still a TMS vendor worth examining.

Jiro Okochi, chairman and co-founder, explains that Reval is confident that its “pure SaaS” treasury and risk management (TRM) single solution is the most attractive offering for the MNC marketplace. He also feels that although SunGard and WSS may be larger in total revenue, many prospective treasury clients value vendor commitment to the product and services, over who is the largest. Multiple offerings in one space by a vendor dilute their support capacity, and also their potential to invest in product development. Reval continues to invest in its single-version product and services, having expended the necessary effort to integrate the treasury management functionality of Ecofinance with its core risk management offering. Reval’s TRM “has won a significant number of deals against traditional TMS
systems”, asserts Okochi as part of his argument that small can be beautiful.Treasurers seeking innovation and product development should perhaps look to the smaller TMS vendors.

“The financial crises have been the trigger for growth and change in the treasury technology business,” continues Okochi. “Treasurers are more focussed on risk, needing real-time visibility of counterparty and other forms of financial risk. Reval’s enhancement program
focuses equally on cash and liquidity and risk management.”


In contrast to the other vendors, GTreasury’s focus has been deliberately focused on the North American market. The company is strategically committed to developing business based on its core expertise in liquidity management, and prides itself on its prudent, conservative approach. “We like who and where we are, and need to ensure healthy sustainable growth,” comments executive vice president, Warren Davey.

GTreasury has developed new business outside North America via referrals and clients’ subsidiaries. Partnerships in Asia and Europe are a possible way forward, as all the team are presently US-based, restricting its reach. The system’s capability to work internationally though is illustrated by the fact that more than 35% of the banks and associated treasuries with which it operates are global operations, primarily based in Europe, Middle-East and Africa (EMEA).

Mr Davey sees the turnover in the TMS industry continuing to increase, as first time buyers enter the market, and system replacements take place. “There are plenty of deals around,” he maintains.

Wallstreet Systems

WSS did not accept gtnews’ interview requests, so this analysis is based on publically available information and the observations of industry insiders. Wallstreet offers an expanded portfolio of TMS offerings that span the corporate spectrum: Suite (the former Trema Finance Kit) for the very high end; the recently acquired IT2; CitiFinancials, a TMS that has a successful history in the UK and Austral Asia; Treasury (originally, the Richmond Software Odyssey system) and Treasura, a cash and liquidity SaaS solution originally acquired from Thompson
Reuters, is also part of its portfolio.

Owned by Ion Group the WSS TMS operation is now part of a large business based on the development and distribution of technology aimed at the wholesale financial ‘buy-side’ – consisting of market makers and proprietary dealers. The IT2 TMS staff (contrary to rumours) is largely intact since the takeover in January 2013, and seems to be taking a wait-and-see approach to the radical shift in corporate culture that is said to be underway internally.

Before its sale, IT2 was, arguably, the leading global corporate TMS, through its workflow management facilities, and its broad and powerful cash, treasury and risk management functionality set. Clients are awaiting the release of IT2 8.2 with interest to see if its reputation for innovation is still deserved. The market is straining to see the emerging direction that WSS’ TMS business will take; remembering that it is a
very small part of Ion’s overall operation.


Today’s TMS market is dominated by two superpowers, SunGard and Wallstreet. Both are well capitalised, and both offer formidable portfolios of treasury technology. Who will most strongly challenge them, and how?

The marketplace is quite buoyant, as outlined in this article. This is because it is becoming industry best practice for corporates that carry a
sufficient level of financial risk to organise treasury departments, and to support their operations with a robust TMS: Excel spreadsheets do not meet today’s audit or management standards for robustness and functional power, although they will remain in some form. Additionally, the demands of regulatory compliance, for example with Dodd-Frank in the US and the European Market Infrastructure Regulation (EMIR), require strong technology support to be efficiently and effectively fulfilled. The number of potential TMS buyers is increasing, but so is the scale and sophistication of treasuries’ functional demands.

The lower end of the business is dominated by SaaS offerings, and this can be seen as either a strength or a weakness. Multi-tenanted SaaS
offers attractive cost benefits, with some monthly subscription fees below US$2,000. Mandatory upgrades are seen by some as a risky nuisance; others will welcome the simplification and low risk of the channelling of support into a single version of a system. SaaS-dedicated vendors tend to be more flexible in contractual terms and pricing.

SaaS, R&D and on-going

The SaaS operators are committed to enhancing their solutions to meet today’s increasing functional demands, and that of course requires sustained investment in R&D. Investors and potential clients must, for their different reasons, be comfortable that each company’s capitalisation, cash reserves, future profitability and commercial outlook are sufficiently strong to bear the load, especially against the real risk of further (or continued) economic crisis or downturn.

There is no obvious need for Wallstreet or SunGard to acquire new TMS offerings. Any further acquisitions by these organisations would more likely relate to opportunistic bottom fishing, competitor elimination, or the addition of new specialist solutions to supplement their existing TMS portfolio.

According to Aite Group’s Camerinelli, smaller TMS companies, which are now evolving from their accounting and cash management base to include higher levels of functionality such as multi-banking and enhanced reporting capabilities, are the most likely to prosper in the changing marketplace, as demand for broader, more sophisticated solutions emerges. His latest research estimates that the total TMS vendor
market reflects a turnover of US$1.2bn, with 9% of the current client base represented by companies with an annual turnover of less than US$500m. “Smaller companies prefer the various efficiencies and ease of the SaaS model. They will
be demanding more sophisticated functionality in the future,” he adds.

There are certainly many companies who prefer the flexibility and potential road map influence they might achieve with a smaller vendor, forgoing the perceived security of going with a larger player. It is those vendors whose product evolution most accurately reflects key industry priorities, and who are sufficiently well capitalised to deliver their roadmap, who will succeed.

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