Treasurer Spotlight10 Minutes With The TreasuryA treasurer’s perspective on the TMS development journey

A treasurer's perspective on the TMS development journey

In this extremely insightful interview, we talk to Michal Zelazko, Senior Treasury Specialist at travel e-commerce specialist Booking.com, about his experiences of developing treasury management systems and what other treasury teams can learn from his journey.

A treasurer's perspective on the TMS development journeyWhat’s your background in treasury and how did you get involved with treasury management system (TMS) side of things?

I’ve been in treasury for more than seven years now. I’m Polish originally, but I started my treasury journey at an oil and gas company in Belgium, where I held the position of treasury analyst. My primary responsibilities were cashflow forecasting, deviation analysis and liquidity forecasting, as well as some bank account administration, and it was there that I had first contact with a proper TMS.

At that point the whole TMS structure was in SAP, including bank connectivity and Swiftnet. That was quite advanced for the late nineties, I have to say, now I look back. Additionally, Equinor was among the first in Europe to implement an in-house bank.

As great as that role was, I wanted to do more on the project planning side, including implementation and truly developing a working solution. So, I moved to a new role within the organization of cash management officer, which was more of a technical position responsible for setting up new bank accounts and rollouts of new software solutions. That gave me more of an in-depth look into how TMS works and helped me realize what a proper solution should look like.

What, in your experience, makes the ideal TMS solution?

Of course, it depends on the company – organisations of different sizes will have different requirements and different specifications. I think there are a couple of primary requirements that every company should look at. The first and the biggest question a company should ask is ‘what do I actually need from my TMS’? I thought that was nicely outlined in a recent article that I read on The Global Treasurer. You need to choose a TMS that will suit your needs, whether it’s from an established brand, it’s a solution from a new fintech or it’s an add-on to another ERP or risk focused tool.

If you’re a smaller company, and you might not be looking at a Swift connectivity, for example, you will need a different TMS to a multinational that’s dealing with multiple banks, and a lot of different exposures. It comes back to need and whether you go for a basic solution or need a much wider solution that delivers more benefits.

Do you therefore think one of the difficulties for companies looking to implement a TMS for the first time, or investing in a new solution for that matter, is cutting through the noise and having a clear vision of what they want and how they will get there?

Yes, and I think good project planning should not be overlooked. Recently, I’ve been involved with implementing in-house bank solutions within the TMS that we have at Booking.com. Especially when it’s a project you don’t really know much about, one of the most important things is to learn from your peers and, most importantly, their mistakes. It really goes a long way if you can reach out to other companies. Seeing how they implement the TMS, or whatever the solution is, can really open your eyes to the choices available. It also encourages you to think about your long-term strategy and goals.

“You need to look into the future and think ‘will we need, perhaps, a netting centre?’”

What do you want to achieve with the TMS within one, three or five years? It shouldn’t be just, ‘okay, we need a payment solution, because we want to consolidate all our payments’ or ‘we don’t want the banking platforms anymore, we want to have a bank connectivity management’. You need to look into the future and think ‘will we need, perhaps, a netting centre?’. Will the TMS that you’re thinking of implementing be able to support that netting centre in the future? If not, what are the possibilities of other products that are on the market that could perhaps feed into the TMS that we want to implement?

Do you think more organisations will therefore look to source tools from FinTech companies, who are starting to target the treasury market? And does this fragment the market and add layers of complexity? Or are the disruptors really revolutionising treasury technology?

This is a very interesting subject. There are a lot of FinTech companies trying to get their piece of the pie, so to speak. And some of them are doing a really good job. However, the worry that I’ve had for a while now, is we’ll end up with a fragmented market. Some of them are doing a bit of risk management, some are doing cash flow forecasting, some are focusing on robotic process automation (RPA). But, none of them can provide an all-round solution that would be suitable for a bigger corporate.

“The complexity of connecting different providers to your bigger infrastructure – not only TMS, but also ERP systems – is limiting”

FinTech solutions might be suitable for smaller companies that don’t have, let’s say, global needs. But, in terms of a bigger company, like Booking, they might be helpful in some areas, but in terms of the whole TMS solution, there’s a lot of fragmentation and still an issue with having interfaces built between those different providers and your bigger TMS structure. The complexity of connecting different providers to your bigger infrastructure – not only TMS, but also ERP systems – is limiting.

However, I think that it’s just a matter of time before they sort out the integration. When they do, the future is bright for those FinTechs, especially those which can be the true market disruptors. Some of them are giving the banks a run for the money. Banks are realizing that they need to heavily invest in tech infrastructure, Banking Online Platforms are a notable example, as a lot of the banks (including some major players) have neglected this, and are finally now refreshing their platforms, in terms of GUI and functionality as well.

In your current role, what have you implemented in terms of TMS and RPA and how did you overcome the challenges that you face? 

We have a really good solution in place, but that doesn’t mean we’re standing still – it’s always work in progress, especially at a company developing as quickly as Booking! To be successful, treasury must be constantly trying to find better ways of doing things.

I think business continuity management is a big topic, especially in terms of sending payments where you’re exposed to multiple banking counterparties. We’re exposed to many kinds of banking counterparties and are working with SWIFT provider, on a Software as a Service (SaaS) basis, to plug into a swift network. Being able to make payments to different counterparties across the globe, and from different currencies from different jurisdiction has always been a challenge.

“This is another situation where we need consistency of standards to simplify the solution”

For example, Purpose Of Payment (POP) codes, which sometimes need to be populated in Swift messages all vary depending on the currency, bank, jurisdiction etc. It can be a real pain to maintain the correct codes, especially if a company is utilizing a payment factory, as the codes change, or new ones are added. This is another situation where we need consistency of standards to simplify the solution. Automation is a key area of focus for us – any solution that automates and simplifies manual tasks that are open to human error can really help treasury teams.

It also goes without saying that different banks, and third parties still have different requirements, and having to maintain all the different requirements in a TMS is still a bit of a cumbersome task, especially if you’re dealing with a lot of different counterparties. It would be great to see some API standardization, as currently, it seems that every bank uses different language, and owing to that the communication across different platforms is still cumbersome. I’m looking forward to the day when open banking and a common API enables cross border, instant cash sweeping, instead of the traditional swift message exchange.

Does the increasingly strategic role treasury is playing within organisations further add to the need to constantly evolve systems?

Oh yes it does for sure. We’re moving our treasury department away from what has typically been a support function, to a more added value one. However, something that I think is often true, in doing this you have to adapt to be a follower, as well as a trendsetter. It’s almost a hybrid position that’s required.

For example, if the business wants to do something, we must follow the business to ensure we can provide the support required. That’s important when a business is developing as quickly and as rapidly as we are. You must be agile – which brings me back to the point I made earlier about integration and using multiple interfaces. Situations like this hinder your ability to react.

At the same time, we are adding value through solutions like in-house banking, netting centres and payment on behalf. We’re repositioning ourselves as well, in terms of where we are as a whole treasury sub-department of the bigger finance department, which in turn brings a complexity to your TMS and ERP systems. You have to make sure that your ERP first of all and your TMS can handle that. And that’s where I think strong planning and asking where you want to be in three or five years’ time is necessary. It’s okay to say that you need a BCM, and it’s still going to be a very hot topic, but organizations also need a system that will support a netting centre. If not, treasurers have to research a FinTech company that perhaps will be able to provide a bolt-on solution that will feed in through an interface to a wider TMS.

And I think that’s where a lot of bigger corporates are heading. I speak from a bigger corporate that has been growing rapidly that there is always a backlog of things that you want to do. Once you realise that there’s an absolute need to look forward and think ahead, rather than just playing catch-up, you’ll start to deliver real value to the business and develop a best-in-class treasury function.

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