Cash Management: Ripe for Innovation and Advancement

by Jacob Jegher, November 21, 2005

Abstract

Boston, MA, USA November 21, 2005

Celent estimates that IT spending on cash management solutions by US banks will reach US$528 million in 2005. This figure will rise to US$633 million in 2007 as banks push the envelope of advancement and innovation.

Corporations of all sizes are increasingly turning to their financial institutions to provide them with an array of cash and treasury management services. Demand from corporate clients, in addition to the competitiveness of the cash management marketplace, is driving an abundance of innovation in this space.

In a new report, " ," Celent examines the state of cash management solutions through a different lens傭y distinguishing core cash management capabilities from complementary, innovative functionalities. Celent explores the core advanced features that banks are latching on to, as well as the bells and whistles that differentiate their products. Finally, the report presents a case study on LaSalle Bank預 bank that has successfully grown its cash management business through innovative advanced features and functionalities.

Financial institutions are being plagued with a disturbing metric謡aning cash management revenue growth. They need new innovative cash management solutions to seek new streams of revenue. However, not all banks or cash management solution vendors are jumping to provide innovative solutions. A true split exists in the marketplace: on one side there are laggard banks and vendors that believe cash management solutions have reached their peak; and on the other side are financial institutions and cash management solution vendors that have clearly taken on the role of innovators. Opportunities exist for banks willing to find them.

"Banks that focus on enhancements to core features and functionality are able to move up the chain and help clients work on improving effectiveness. From there, banks can reach an even higher peak on the road to innovation傭uilding an improved customer experience," says Jacob Jegher, senior analyst in Celent's banking group and author of the report. "By striving to reach the summit of this peak, banks will be able to better comprehend the needs of their corporate clients and can more effectively further enhancements to their core product."

This 30-page report contains 6 figures and 4 tables.

of Celent's Wholesale Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

 

Boston, MA, USA November 21,  2005

Cash Management: Ripe for  Innovation and Advancement

Return to report Abstract

Executive Summary 3
Current State of Cash Management 4
  Cash Management Revenues: Innovation Required 4
  Do Innovative Banks Build In-house or Use Vendor-Provided Solutions? 8
Advanced Features and Functionalities 9
  Core Features and Functionalities 10
  Complementary Equals Core 12
  Bells and Whistles - Overkill Today, Differentiation Tomorrow? 15
IT Spending on Cash Management Solutions 17
LaSalle Bank: A Beacon 19
  Background 20
  Decision-Making Process and Objectives 20
  Solution Overview and Implementation Milestones 21
  Best of Both Worlds: LaSalle's Unique Relationship with Digital Insight 27
  Benefits 27
Conclusion 28
Objectivity & Methodology 29

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