Treasury Matters: Is a SaaS Solution Right For You?

The market for treasury management solutions has witnessed a number of important innovations over the past few years, one of which is the introduction of the software as a service (SaaS) deployment model.

As often happens when new technology is developed, it is easy to assume that because SaaS is now so regularly discussed, it provides a ‘one size fits all’ solution for treasury, irrespective of the specific needs and considerations that exist.

You want to be selecting a true partner, not just a vendor who can navigate you through the selection process

Undoubtedly, SaaS brings a range of opportunities and benefits. However it is important that when selecting a vendor, you are given a selection of multiple deployment options and that the vendors have the necessary experience and expertise. You want to be selecting a true partner, not just a vendor who can navigate you through the selection process, implementation and support you going forward.

I will outline below what SaaS really means, whether it is the right option for your business, and what alternatives may exist.

What is SaaS?

As with any other industry jargon, the term ‘SaaS’ is often applied to a variety of different scenarios, often erroneously. In particular, it is important to distinguish between a SaaS solution and a system that is accessed via a web browser.

SaaS solutions refer to a treasury workstation or treasury management system (TMS) that is hosted by the vendor or another third party, with users accessing the application via a web browser using their user ID and password. There is no software located on the company’s own platforms, so no dedicated hardware or IT resources are required.

Instead, the TMS is hosted in a common environment with a shared database (although access is only permitted to the company’s own data). Upgrades and corrections are provided automatically, as opposed to being scheduled between the vendor and customer.

SaaS is not the only treasury solution that can be accessed by a web browser, as opposed to requiring specific software or drivers on the user’s PC (which may also be a mobile device in some cases).

A TMS may be installed on the company’s own IT infrastructure, but still be easily accessible to users, e.g. via a browser. Alternatively, hosted, or ASP (application service provider) solutions are those hosted and managed by the vendor or a third party. Again these may be accessible through a web browser.

Like a SaaS solution, hosted solutions are managed by the vendor, reducing the amount of IT resource that treasury requires. In contrast, however, the system is often hosted on a dedicated platform, with the customer controlling the timing of major events such as upgrades.

Is SaaS right for me?

SaaS solutions undoubtedly bring a variety of benefits for customers of certain profiles. There is no need to dedicate IT resources to implementing and maintaining a treasury solution; similarly, interfaces to external systems such as electronic banking systems are managed by the vendor.

Many companies are attracted to this model, and it is an ideal solution for delivering functionality across multiple systems. For example, an eBAM (electronic bank account management) or bank fee analysis solutions can be delivered via SaaS solutions, in addition to cash management, debt management, investment management and so on. 

But while SaaS treasury solutions bring obvious advantages, you need to consider your functional requirements carefully before determining whether this is the right approach for your business.

By using a shared treasury environment, there is less flexibility in workflows, instrument definition, reporting and key performance indicators (KPIs) than an installed or dedicated solution can provide, and no ability to add custom processes. And it may not be straightforward to integrate a SaaS treasury solution with in-house systems such as a payments factory.

If you have relatively straightforward treasury requirements, these issues may be insignificant. If you have more bespoke functional, reporting or integration requirements, the loss of flexibility resulting from a shared environment may mean that either a hosted solution, or solution installed on your own technology infrastructure is more appropriate.

With a SaaS solution, upgrades are performed across the whole customer base at once, so individual customers have no discretion over the timing of upgrades.

A hosted solution, for example, still avoids the need for dedicated IT resources, but treasurers benefit from greater flexibility and sophistication in functionality, reporting, processes and instrument definition. If you are looking to implement capabilities such as SWIFT 3SKey for personal digital signatures, this will typically be better supported through an installed or hosted solution.

Another criterion for deciding whether a SaaS solution is right for you is the way in which the solution will be maintained over time.

With a SaaS solution, upgrades are performed across the whole customer base at once, so individual customers have no discretion over the timing of upgrades. Again, where your treasury requirements are relatively modest and user testing of new upgrades can be completed quickly, this probably presents few issues and may be considered an advantage.

But if your treasury is larger and/or more diverse or complex, it can be inconvenient to have the timing of upgrades imposed on the business. For example, it may not be feasible to perform extensive user testing during busy periods, e.g. staff holidays or major events such as mergers or acquisitions. Changes to functionality may be undesirable during these key business events.

The wider enterprise

There are also factors beyond treasury that may influence the decision on SaaS adoption. Some companies’ IT security policies dictate that SaaS solutions are not permitted. Treasurers are required to hold sensitive systems and data in-house or in a dedicated hosted environment.

The growth of the ‘big data’ concept will also increasingly be a factor. As the amount of data with which every organization is bombarded continues to grow, the idea of ‘big data’ is to manage the volume, velocity, variety and veracity of data in a structured and meaningful way.

This is likely to have a major impact on the way that many companies approach their business applications and databases, including in treasury. Because treasurers do not have their own database when accessing a SaaS treasury solution, it is far more difficult to accommodate a ‘big data’ approach.

Innovation for greater choice

Treasury management solutions have developed enormously over recent years in response to new technology opportunities and treasurers’ functional responsibilities. SaaS deployment is one manifestation of this evolution and offers considerable opportunities to many treasurers for whom a TMS appeared an unrealistic option in the past.

It is only one innovation amongst many that are taking place, however, so treasurers need to consider their IT, functional, reporting, integration and security needs carefully before deciding whether SaaS is right for them.

Choosing the right deployment model can be an important factor in ensuring that your treasury achieves the balance of convenience and accessibility with functionality and information.

About the Author

Paul Bramwell is Senior Vice President, Treasury Solutions, at the corporate liquidity business of SunGard Financial Systems.

Photo credit: Shutterstock

Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern