Bloomberg late last year officially announced they are launching their own fully integrated treasury management system which supposedly covers all aspects of a standard TRM including cash management, risk management, trade execution, lifecycle management and hedge and treasury accounting.
One participant at the Budapest 2014 EuroFinance Conference viewed this as one of the most interesting developments in the treasury technology market for the past 10 years.
The market generally confides in Bloomberg’s market data and pricing models and the solution will undoubtedly gain traction with existing Bloomberg users. If priced appropriately (current price tag is $25k per year and it only requires one Bloomberg terminal license – another $25k per year) it might also give Bloomberg a competitive edge over their market data duopoly partner – Thomson Reuters – for corporates choosing a new market data platform if they can get a TRM as well with Bloomberg. It should be noted that Thomson Reuters have themselves made an attempt at TRM with Kondor+ which was eventually spun-off and later picked up by Misys.
The details of the solution are still sketchy, but apparently Bloomberg has acquired a web-based off-the-shelf TMS aimed at the mid-market corporate segment, which will then be integrated with their trading platform (FXGO), market data and risk management platform (MARS). The cash management module comes with SWIFT integration, which is “a must” for TMS today. Comparing Bloomberg TRM® with the specialist systems (i.e. Reval, SunGard, WallStreet/IT2, Kyriba etc.) you should be able to achieve more seamless integration of market data, pricing, and online trading, while at the other side of the market ERP-based systems - such as SAP TRM - gives you the integration towards your ERP. For the specialist TRMs integration will have to be built for both sides.
It will also be interesting to see how this will affect Bloomberg’s current close cooperation with the other specialist TRM vendors in the areas of market data delivery and pricing and integration hereof into their systems. As they now will be competitiors the relationship might be a bit more strained.
Bloomberg certainly has the size and financial strength to be a serious competitor in the market if they remain committed and continue developing their solution. TRM vendors need to focus very highly on their product as functionality demands are very dynamic. Bloomberg will have to maintain a strong focus on their TRM, without harming the quality of their market data, pricing and trading products. If they manage to do that, they will be in a very strong position.
By Nels Mortensen, Corporate Treasury Manager, First Treasury Pty Ltd