Multiple benefits of a single solution for cash and risk

By Ben Poole

31 July 2018

On April 17, 2018, GTreasury announced that it had acquired and will merge with Visual Risk. The prospect of combining GTreasury’s cash management software with Visual Risk’s risk analytics and hedge accounting software into a single treasury and risk management solution is exciting news for the treasury systems market.

GTreasury and Visual Risk have a lot of similarities, which are aiding the integration. On the technology side, both have grown up on the Microsoft Cloud stack, using Microsoft SQL Server and secured endpoints in Microsoft Azure.

"Both of the products are significantly API rich," says Alok Tyagi, chief product and technology officer at GTreasury. "We connect with around 2,000 different banks, and the same is true on the Visual Risk side. The similarities in the technology between the two organisations creates a lot of synergistic opportunity when we think about the single solution."

"Our technology is modern and aligned," agrees Terry Beadle, GTreasury's global head of corporate development. "That is one of the reasons why we merged. We are starting with two best-of-breed global systems that complement each other and will create one single, comprehensive treasury and risk management system."

Likewise, from a people and talent perspective, the way the two companies operate is very similar. "Both companies operate with an agile framework," says Tyagi. "Both teams operate two-week sprint schedules [development cycles], so we are very agile. We deliver software updates to customers every four to six weeks. Culturally, we are very much aligned."

Rising risk priorities

The increasingly strategic nature of the treasury function is an important factor in the increasing ownership it has over financial risk management in the organisation. The 2017 AFP Strategic Role of Treasury Survey found that four out of every five survey respondents (80%) believe that treasury is currently playing a more strategic role in their organisations than in the past three years. Additionally, the same percentage agreed that the treasury function would be playing an even greater strategic role three years from now. The close attention paid by senior management and the Board to liquidity and risk exposure is a primary reason for treasury playing a greater strategic role at companies, according to 73% of treasury professionals.

"There has been a push for treasurers to have to start doing risk analysis, to see exactly where the stresses are on the business, and what might affect it," says Alankar Karol, chief operating officer (UK/Europe) at Visual Risk. "The coming together of GTreasury and Visual Risk will provide a single platform where cash and risk management can happen side by side simultaneously. One cannot work at its best without the other. Historically, most treasury systems have succeeded in only offering cash management. Now you have both cash and risk management with high-end analytics, but more importantly both are actually talking to each other with a free flow of information. This not only provides total visibility on risk and cash, but also on the risk to cash, at the same time."

"We are all familiar with the 'cash is king' mantra, but it is vital to remember that cash is also risk," adds Beadle. "The risks that flow from liquidity in terms of your exposure to FX volatility are not always correctly identified. You have to have these things under control."

Treasury technology needs to allow users to visualise their liquidity and their exposures, to be able to think about the hedging strategy and be able to test it against a whole range of outcomes using scenario analysis and stress test tools. These need to be tied in to the whole workflow, something that becomes possible in a truly integrated TRMS.

"Quite often systems will look at risks in silos," says Karol. "What we do is combine all the risk factors together, and look at the correlation analysis between these risk factors to provide a comprehensive picture of how they move with each other or, sometimes, against each other. This provides a consolidated cash flow at risk picture that highlights profitability and risk, whether there is going to be any stress on your income, what this stress will be, and what you can be doing to address this."

Seamless technology integration

Another risk area that a true TRMS can help with is on the operational risk side. For treasurers dealing with at least two systems for their liquidity and risk management needs, getting the various systems properly integrated can be a big challenge. Systems support and software updates come from multiple vendors, and it is not unheard of for a change to one system to create issues with the integration.

A single solution for cash and risk means that there are no double teams, no having to worry whether the interfaces are going to break down or whether information will get lost in translation. It is also less stressful for the analysts doing the work, as they no longer have to do reconciliations and instead can just focus on the analytics.

"If you were trying to transfer information from one system to another, or from spreadsheets to the system or vice versa, much time would be spent ensuring nothing was dropped or missed, so the analytics would receive less attention," says Karol. "Now all the low-level thinking about reconciliation goes in to the background, leaving treasurers freed up to perform the higher end analytics. This creates the answers that can filter through to the boardroom for better decision-making at all levels of the business."

This again speaks to the increasingly strategic role of the treasurer. Technology can be the enabler for the treasurer to move from an operational level to a strategic level. "What we have done by bringing these two companies and technologies together is to create the bridge that allows the treasurer to easily take that journey to the strategic level," says Karol. "The dream of the strategic treasurer is now a reality."

Bringing the expertise of both companies onto one single platform creates a seamless system that delivers end-to-end value, as Tyagi explains:

"We are already seeing how bank transactions flow from the liquidity side of the dashboard to the risk side of it. Likewise from the financial instruments and how payments move back and forth with a single, integrated solution. We can manage those processes and have a single reporting approach. This is a very innovative aspect of the single solution. It encapsulates the whole notion of machine learning-based data intelligence, looking at the patterns and fraud concepts that otherwise would not be possible. It is a single system, but more importantly it is a single version of truth. It provides a common set of records, rather than a scenario where you are running two systems and have multiple sets of records that can create confusion and error. We have a single database across the entire treasury department."

Both simple and sophisticated with SaaS

Treasurers are demanding solutions that are more democratic. This applies to technology that is easy to get up and running, through to simplified day-to-day operations.

"Simplification is the ultimate sophistication," says Beadle. "This is what is driving the workflow – making our single solution as democratic and usable as possible, while retaining sophisticated capabilities in the product to help treasurers deal with complex challenges."

A single database across the entire treasury function is one way to simplify things. Delivering the solution as software-as-a-service (SaaS) is another, as this dramatically reduces the time and money a corporate needs to spend on implementation and maintenance. Treasurers are looking for easy access to a much higher quality of software and a much higher bar around service and security management.

"Customers are looking for a far better return on their technology investments, and they want continuous delivery of value on a regular basis," says Tyagi. "That is why SaaS makes a lot of sense to digital treasurers. They can get up and running relatively quickly, and then see regular innovations happening in the solution. There is also a higher expectation on the vendor to deliver high quality software, a high up-time, and a higher level of reliability and disaster recovery."

These expectations are also high internally in terms of the way that the company operates, in relation to data recovery, the monitoring of the system environment on a 24/7 basis, and the level of up-time expectations that the company has.

"There is a much higher bar in terms of enterprise level performance and reliability," notes Tyagi. "Given the way we drive our product management function, which is all about driving customer-connected innovation, we are constantly creating new customer value. With SaaS, our customers are regularly seeing innovation. We are deploying continuous innovation on a global basis, leveraging the Microsoft Cloud Stack."

A new proposition

"I think this product is the first platform of a new generation of properly integrated cash and risk solutions on a SaaS platform with all of the benefits that entails," says Beadle. "It has not been possible to have a product like this before, because treasurers either had to go down the multi-million pound monolithic system route, or they had to compromise with a SaaS solution that did not adequately cover all of their cash and risk needs."

GTreasury's acquisition and merger of Visual Risk adds a new choice for treasurers because it integrates cash and risk in a way that has not been possible before. By having this on a SaaS platform, it brings customer service to the fore. "It gives corporates a choice of a vendor that is modern in technology terms, complete in functionality terms, and well-resourced and expert in service terms," Beadle concludes.

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