Over the past year, the treasury function has been directed by a host of new rules, regulations and been forced to react to corporate restructuring, while many corporate treasurers have been tasked with opening their firms to new markets.
Last year, volatility was subdued across financial markets, leading treasury managers to look for new and innovative sources of arbitrage and hedging opportunities. Since the financial crisis, market participants have been limited in the amount of exposures they’ve been willing – and able – to take, given the slew of regulations during the recovery period. Similarly, while many of the world’s governments executed quantitative easing plans, cash became difficult to come by. Mitigating risk – be it operational, market, or liquidity – was becoming more difficult for the modern treasury manager it seems.
Thankfully, developments across the TMS market have stepped in not only to help automate a range of processes, make better uses of resources, but to help with the functional and strategic requirements of the treasury function. Advances in artificial intelligence by many TMS providers has allowed those who use them to better analyse larger chunks of data and react to ever-smaller market movements. A wider and deeper application of blockchain and distributed ledger technology has allowed treasurers to become more agile, and the greater ability of firms to integrate TMSs within the wider business has seen a burgeoning of developments.
And while some organisations have looked internally to advance their treasury management systems, most look to the fintech arena for assistance, recognising that smaller companies dedicated to the latest technological advances often offer better products, be they off the shelf or custom built. Across the globe, governments and regulators have stepped in to encourage fintech developments – some providing seed funding, others creating sandbox initiatives to help take projects to the next step and ensure compliance.
Further, 2017 saw many companies realign their systems with the second Markets in Financial Instruments Directive (Mifid II), and this year has seen the reframed compliance requirements, reporting obligations and rules in place. While many struggled to get systems in place toward the end of last year, this year has seen a far more market-focused approach by finance professionals – no doubt with thanks to the fintech sector.
All that has amounted to a global TMS market, driven by both corporate and public enthusiasm, and regulatory necessity over the past year. Without doubt, TMS providers have enjoyed a bountiful few years thanks to market conditions – but in sustaining technological advances and applying them to their core clients’ needs, many of these providers have created outstanding products and services capable of driving innovative solutions for treasury managers.