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Treasury vendors take on corporate tech outsourcing /Euromoney …

The in-house technical capabilities of
treasury are being further streamlined
, with third-party
vendors often taking on the role of the chief technology
officer (CTO). Although turning to third-party vendors to
provide software is not a new concept for the industry,
externally hosting those platforms on vendors’
servers is a recent concept.

Ed Adshead-Grant, general manager at Bottomline
Technologies, says: “What we’re seeing is that
CTOs are leaving and the role is

not being filled. The tech decisions are instead being
outsourced to the partner. The consumption of IT is changing.
An external partner can understand the tech and make the same
decisions as well as a CTO previously could.”

The streamlining of internal teams is being used to reduce
costs and workflow demands. Adshead-Grant says a lot of the
change is


forced by the new ‘gig economy’ companies
are focused on payments processing and user experience, rather
than running all operations in-house. Managing technical
operations is a small but vital part of treasury, and might not
require having a permanent member of staff.

Lisette Overmars, director, treasury and finance solutions,
at consultancy Zanders, says: “Maintenance and support of
treasury systems is not a full-time job; it can happen that IT
people are not involved in system issues for months or longer.
So how much time and money does a company want to spend on
investing in this knowledge?

outsourcing can be a beneficial alternative
. It is of
course important for a corporate to look at the confidential
data side and the contingency of the critical treasury
processes, but professional vendors have taken care of this

For some, the fees associated with paying someone else to
oversee technical operations can be more cost effective,
especially at a time when treasurers are under scrutiny from
their boards to increase the profitability of their

Stephen Baseby, associate policy and technical director,
Association of Corporate Treasurers, says: “The decision to
outsource can come down to simple maths; is it cheaper to hand
over to someone else or to integrate and do it yourself? There
is no standard response, each company will know how to look
after itself.”

Martin Bellin, founder and CEO at Bellin, says there can be
big financial benefits to pushing out low-risk parts of the
business: “The outsourcing of responsibilities is something I
would not consider, but the outsourcing of operations,
especially the ones where no detailed knowledge of the business
is required, is much more efficient. Being a provider of such
services, we can support 10 to 20 treasury departments with a
team of four. Without outsourcing, this would at least require
one or two FTEs [full-time equivalent] per company, ending up
with 15 to 30 FTEs – that is four to eight times the


The costs are not just associated with personnel, as the actual
running of servers can use up resources. Baseby says the need
to bring platforms up to standard can be one of the biggest
drivers in forcing the change: “From the IT perspective it can
be argued that if a big upgrade is needed, is it worth taking
up so much space on the internal servers? The alternative can
be as simple as logging on to an external website for the same
processes if it is outsourced. Otherwise outsourcing daily
treasury operation is a decision as to whether to resource
skilled manpower or paying the outsourcer.”

Some vendors are already seeing the opportunities in
offering treasury and technology services as a package
Baseby says: “FIS, for example, runs its treasury system on its
own servers. Companies that get to the stage of knowing they
need to upgrade their systems can assess the expense of needing
additional computer capabilities, process and storage, and
decide they are better outsourcing before the IT team begin the

Working with the FIS systems, Zanders has developed the
Treasury Continuity Service to give advice to companies with
small and under-resourced treasury teams. The service works on
a monthly subscription basis, with customers paying fees only
according to how many days they used Zanders services each

In doing so they reduce the cost of having to upgrade their
own servers in order to host new treasury platforms.

Bottomline runs a service allowing the customers to only
access, and pay for, the facilities that they need.
Adshead-Grant says: “We operate a pay-as-you-go model, allowing
the customer to pay for only the IT assets they need. The aim
is to avoid barriers to entry, and high set-up costs. There are
no long-term contracts attached to using the service.”

Overmars adds that the improvement in tech capability has
forced this shift towards using external parties. The need to
have a member of staff oversee each update on any platform has
also been removed: “Due to SaaS and other outsourcing
solutions, the need for internal IT support decreased and is
shifted towards the vendors.”

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