More and more companies are migrating to the cloud for their software requirements and according to technology research firm Gartner, cloud made up 52% of management software sales in 2014, a figure which makes SaaS solutions one of the most popular models for treasury management systems to use because of its flexibility, ease of use and affordability.
Martin Taylor, VP of sales for Northern Europe at Kyriba, said in a recent article for ITProPortal that financial institutions are favouring SaaS solutions even traditional treasury management systems that have a much deeper enterprise resource planning (ERP) integration are progressing to this form of system model.
The KPMG 2014 Cloud Survey Report revealed that there are many challenges that treasury departments consider when moving to the cloud, and 50% of respondents said that intellectual property theft, privacy risk and data loss were a concern.
Taylor believes that these concerns are not factual and are based on outdated perceptions. “Even for the most risk-averse technology users, any possible drawbacks of migrating to the cloud are far outweighed by the operational, innovation and cost benefits that it will continue to deliver throughout its lifecycle,” Taylor said.
The risk of intellectual property being stolen is minimal, as SaaS solutions are hosted outside of the corporate network and all the data is stored in the cloud. Alongside this, investment in SaaS software vendors is much higher than what individual end-users can afford, so the costs per user are much cheaper.
Security measures such as encryption and multiple firewalls are implemented by the SaaS system, which means that any compromise of information is significantly less likely than if the solution was hosted on the company servers.
Another benefit to having an offsite SaaS system is that there is no need for an in-house IT team to support the system because SaaS is browser-based and there is little concern needed to establish whether or not it will be stable in a particular environment or have an impact on other systems.
Cloud computing is cheap because the company only have to pay an upfront implementation cost, plus fixed monthly subscription fees, which means that annual investment in this technology is fixed but the return on investment (ROI) remains variable depending on the system’s capability of completing a particular project.
The upfront implementation cost that a treasury department will have to pay will be for bank connectivity, to implement a custom application program interface (API) into the corporate ERP.
Taylor states that the costs for a treasury department using SaaS solutions is generally similar to other systems but what makes cloud computing different and better is that “SaaS implementation is done by the provider’s own team, which will have many years’ experience with the solution, it will often be a quicker, and therefore less expensive, process.”