Treasury Management: Origins and Directions

by James O'Neill, July 25, 2014
Product Trends/ Reviews
North America

Abstract

The role of the modern corporate treasurer has evolved significantly over the past 30 years, driven by bank deregulation, competition in the capital markets, and the impact of technology in the delivery of treasury services.

The corporate treasurer’s role has evolved from the cash manager and bank relationship lead to the principal risk manager for the corporation’s financial assets.  Similarly, the capability of TMS systems has grown to support the corporate treasurer’s widening responsibilities.

In the report Treasury Management: Origins and Directions, Celent traces the evolution of the treasury management profession over the past 30 years, examines how technology has enabled the advancement of the TMS practice, and provides an overview of the vendor landscape for TMS systems.

This report is the first in a series aimed at developing insight into technologies that support TMS operations. Upcoming reports will examine the drivers of demand for TMS systems among corporate buyers, TMS system deployment options, and the primary service differentiators in alternate third party TMS systems. 

The role of the corporate treasurer has come a long way from its original focus on cash manager and bank relations. The various elements and layers of responsibility of the corporate treasurer are underpinned by the central role that technology plays as the “glue” of the treasurer’s office.

“Today’s corporate treasurer is faced with a bewildering number of options among financial instruments, bank and investment bank partners, and technology platforms,” says James O’Neill, Senior Analyst with Celent’s Banking Group and author of the report. “At the same time, the regulatory environment and the internal demands have raised the stakes for implementing best practices in treasury technology and operations.”

This report begins with a look at the history of treasury management, with a review of the macroeconomic environment, the regulatory and competitive environment for banking, and the role that technology played in advancing the practice of treasury management.  The report goes on to review the strategic role of treasury in today’s corporate environment and the various roles that corporate treasurers play today within firms.  Finally, the report looks at the technology landscape for TMS systems, from simple spreadsheet-based applications to sophisticated systems provided by banks and third party technology vendors.

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 operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

2

Origins of Treasury Management

3

 

Macroeconomic Environment

3

 

Deregulation and Competition

5

 

Technological Advances

7

The Strategic Role of Treasury

10

 

Liquidity Management

14

 

Investment Management

14

 

Capital Management

15

 

Risk Management

15

 

Enterprise Financial Management

16

The Treasury Management Technology Landscape

18

 

Spreadsheets

19

 

Bank-Based Systems

19

 

Vendor Systems

20

 

Summary

21

What’s Next

22

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

Sign in to download reports and access personalized information