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Mary Ann E Rydel
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GTreasury Celebrates 30 Years of Managing Liquidity and Minimizing Operational, Financial and Reputational Risk

Recognizing and Capitalizing on Market Trends, Collaborating with Customers to Meet Specific Treasury Management Requirements Brought Success and Staying Power 

For a while, early in his career, Orazio Pater was persona non grata in the banking world. You couldn’t find a banker who was willing to buy the Milan, Italy native a cup of coffee. No wonder. He was the first to take away the handsome, effortless profits that banks made on float from non-interest-bearing deposits.

Nowadays, it’s entirely different. Banks, along with many multinational corporations, have been among the best and most loyal customers of Pater’s firm, GTreasury. For the last thirty years, the company has grown organically to the point where it stands today as the premier liquidity management firm in the world.

How Many Banks, How Many Dollars? 

Back in 1970, while Pater was attending graduate business school at the University of Minnesota, he had a job in the newly created office of the treasurer at Honeywell, Inc. One day he asked his boss, “How much money do you think we should have in the bank?” The man thought a minute and guessed, “Oh, maybe $21 million.”

Pater went back to his cubicle and began dialing. Later that day he produced a tally sheet showing some $85 million on deposit, in checking accounts, at approximately 80 banks. He and his boss transferred about $65 million to interest-bearing accounts and short term investments that paid up to 15% in those heady days. For the year, they generated around ten percent of Honeywell’s net profit.

“We essentially sucked all the float out of the banks. That was the first time we started managing cash based upon what the banks had on deposit rather than upon what our checkbook said,” Pater recalls.

Harnessing Evolving Technologies, from Mainframes to Personal Computers 

Those were the days when mainframe computer time-sharing was the only way to tap into the power of information technology. Pater convinced a couple of Honeywell engineers to undertake a skunkworks project and write him some code. He then went looking for a way to collect data from the banks and found it at National Data Corporation (NDC), a telephone-based credit-card authorization business in Atlanta.

The result was the world’s first treasury workstation. Honeywell’s banks would call in the balance figures to NDC, which entered the data into the system and gave Pater and his team accurate, current information on the company’s cash position.

In 1974, Pater moved to Atlanta and ran NDC’s first cash management division. The business grew steadily to $45 million in sales. Its clients included 12,000 corporations and 200 large banks.

But by the 1980’s, personal computers were taking over the business world. Pater saw that mainframes would soon give way to desktops and minicomputers. National Data was hesitant about cannibalizing or moving away from its lucrative time-sharing-based business. So Pater and his wife Peg made their move. They bought a portion of an Illinois financial services company that specialized in PC technology. They created a new company called Gateway Systems, and set out to provide treasury management services using what they saw would be the next big thing in IT.

Collaboration with Customers – the Secret of Success 

Gateway’s breakthrough client was the American Express Company. Its offices in Germany needed to serve migrant workers from Turkey, who wanted to send money home to their families.

Pater and his team designed a system where the workers would bring their cash to an AmEx office. The manager would key the information into a personal computer and send it to Gateway. The next morning, funds would be available at any of 19 banks in Turkey.

In the mid-90s, after a successful stint in Italy where they served two major banks, Gateway refocused on the US market. They worked with Prudential Insurance to develop an enterprise-level treasury workstation. A few years later, General Electric and Gateway collaborated on design of a treasury management system to serve all GE facilities. That product, GE WebCash, is still in operation; more than 5,000 GE workstations around the world access it every day.

A New Name, New Worlds to Conquer 

In 2008, Gateway changed its name to GTreasury, which more accurately reflects the company’s sweet spot and sole strategic focus, treasury management. Each day, transactions and transfers in excess of $40 billion course through treasuries that use GTreasury’s software. Pater notes that the cloud computing of today is similar to the mainframe time-sharing that was his launch pad into the business more than 40 years ago.

“The move to the cloud means an increase in the use of shared resources, but the cost structure is very different from the mainframe. With every transaction, there was additional mainframe computer time and an additional fee. The cost curve was linear. That’s not the case with the cloud,” he explained.

“We’ll undoubtedly see continued, incremental changes in the technology. But the mission will always be the same – to illuminate the treasury’s liquidity by centralizing all incoming and outgoing banking activities, whatever the technology may be.”