Technology's Role in Corporate Risk Management

Date:   Tuesday , August 23, 2016

Headquartered in Bengaluru, IBSFINtech provides a suite of financial products & software that help businesses manage Forex, Treasury and Trade Finance, irrespective of the size of their organisation.

\'How can I do more with less?\' is today\'s Treasurer\'s key concern. With treasury evolving into a more strategic role, this concern becomes more and more relevant. Let us understand the current state of technology adoption in corporate and then dive deeper into how technology can facilitate today\'s treasurer to do more with less!

Current State of Technology Adoption in Corporate

Today, most large companies\' technology landscape includes an Enterprise solution (from large vendors), some legacy applications, and a host of excel/home-grown utilities. To make situations complex, most of these systems are standalone, or at least incapable of communicating with each other seamlessly.

While in medium sized organizations, treasurers even today, are dependent on archaic systems such as spreadsheets for treasury management. Though it has been proven repeatedly that spreadsheet solutions are not capable of managing the pressure of treasury management. And this is simply because spreadsheet management requires treasurers to first feed in data from multiple sources, and then render this data useful for analysis. This manual process is not only time-intensive but also ineffective, as by the time this data is rendered useful it is too late and inaccurate for any decision making.

In today\'s fast paced volatile markets, decision making depends on real time and accurate information. Such complex technology landscape makes it almost impossible to have single-instance of truth about Forex exposure in real-time manner for its key stakeholders like the Traders, Controllers and CFO.

What is the hindrance?

Perhaps, the sole reason for lower technology adoption could be unavailability of simple but holistic TMS (Treasury Management System). Most TMS available in market are extremely complex, require long implementation time and involve steep learning curves.

The speed, volatility and size of the currency markets makes it impossible to handle Forex risk with such archaic systems support, and thereby making corporates extremely vulnerable and making exposure management a highly critical activity.

What can technology do?

Integrated approach, automation and productivity gains continue to be the driving forces behind many companies\' decision to move to treasury management software from archaic spreadsheet management. Technology can play prominent role in designing a real-time analytics driven Treasury Management System which is capable of handling multiple asset classes and has real time interface with multiple trading platforms and markets, and also integrates seamlessly with organization\'s transactional systems. And with such a comprehensive TMS at play, Treasury team can take advantage of sophisticated derivatives such as Options and Futures (multiple varieties thereof).

A TMS facilitates efficient treasury management and helps treasurers focus on tasks beyond cash flow monitoring. It also reduces manual data entry, data compilation & data analytics, and saves enough time for treasurers to devote time towards strategic decision making. Ultimately, supporting the treasurer in doing more with less!

Concluding this article with a question for you to ponder upon - \'What are the parameters to consider to evaluate and select the right TMS for your organization?\'

Measure the TMS on these parameters:

1. Ease of implementation.
2. Seamless integration with your existing complex technology landscape.
3. Real time information with in-built analytics.
4. High Return on Investment.

Also, take an informed decision in selecting the right TMS which helps the treasurers do more with less.