Any takers for Treasury-as-a-Service (TaaS)?

“The modern treasury group is strategic, collaborates with the businesses it serves, and is using automation, offshoring, and treasury centers of excellence to consolidate and standardise tactical areas,” reported Deloitte’s 2015 Global Corporate Treasury Survey. “Treasurers clearly have strong mandates from their chief financial officers CFOs to be strategic”

According to the 2015 Treasury Strategies Benchmarking Survey: “Ninety-two per cent of finance professionals consider treasury to be a key contributor to business success, and most of them see the function´s importance increasing within the next three years.

“Treasurers turn towards technology in order to continue to do more with less. Treasurers are either reviewing existing technology (41%) or implementing new solutions (45%) to address the challenges they are facing.”

These findings – together with other treasury literature and surveys published recently and from feedback while interacting with customers, analysts and the global treasury community – send out a clear message. The new age treasury function, which aspires to be ready for future challenges, needs to:

• Play a strategic role within the business: All this takes is time (although this is often a scarce commodity for lean treasury teams) and a certain amount of brain power.
• Use technology effectively to survive, sustain and succeed: All this takes is some investment.

Yet many corporate treasuries continue to feel challenged by having to spend significant time and efforts on operational, tactical and analytical activities due to:

• Continued reliance on manual Excel spreadsheet-based processes for global cash visibility and forecasts.
• A lack of updated treasury technology infrastructure.
• Limited connectivity with their banks and market information systems.
• A lack of actionable treasury insights for decision making and support.

The TaaS model

So what do corporate treasuries need: technology-led solutions, which take care of the majority of operational, tactical or analytical tasks so they can focus their time and efforts on strategic initiatives.

One potential solution that treasuries can adopt is in exploring a different way to run treasury operations via the “Treasury as a Service” (TaaS) model. This model enables corporate treasuries to engage a technology and service-based solution provider to take care of the day-to-day operational and analytical treasury activities. This, in turn, means that so they can focus a significant portion of their time and efforts on their strategic and analytical work.

This could be typically enabled by a combination of outsourcing and the power of a next generation technology treasury management system (TMS). A software-as-a-service (SaaS)-based subscription model probably offers the most effective means to optimise costs and also IT operational overheads for support and maintenance.

In the TaaS model, the solution provider:

• Enables treasury automation, using a next generation technology platform.
• Delivers consolidated and standardised treasury services for both operational and analytical activities.
• Provides actionable treasury Insights via real-time reports and dashboards for financial decision making.

In a nutshell, all the people, processes and technology required to perform each day-to-day operational and analytical activity within treasury are taken care of. Consequently, the treasury team can mostly focus on strategic activities – around policy, risk, strategic investments and business expansion – which deliver business impact and address the increasing expectations of both the chief financial officer and the chief executive (CFO/CEO).

However, is the TaaS model relevant for all kinds of corporate treasury, or does it depend on the organisation’s size, treasury maturity, geography presence and technology savviness? Does this model in any way increase the risk of both treasury and the business as a whole, due to data visibility and dependency on an external partner? How many takers, if any, will there be the TaaS model both today and over the years ahead? Leave a comment to let us know.