5 key areas where your financial institution’s TMS can have a significant impact


Over the past decade, traditional financial institutions (FIs) have been unable to make the most of emerging opportunities in online markets, ultimately causing them to lose ground to card providers and card companies. fintech more agile.

In recent years, traditional FIs have started to regain some of this lost market share, partly by leveraging their size and stability and also by updating their systems with solutions using current generation technologies. . A recent development that has enabled some FIs to be more competitive in the current environment is the wider deployment of modern Treasury Management System (TMS) solutions.

While modern TMS solutions facilitate the same cash management tasks as previous generations of software, the use of advanced artificial intelligence (AI), machine learning (ML) and cloud-based technologies has led to a massive increase in capacity. If you are considering investing in such a solution for your own FI, here are some key areas where a TMS upgrade would make a big difference and therefore be worth the effort:

Network availability

Current generation cash management systems tend to be more reliable than their predecessors. This is largely true thanks to the iterative improvements in the operation of these software packages. Most of the reliability gains, however, are due to a widespread move to cloud-based banking systems.

Most modern TMS solutions can be implemented in the cloud through SaaS (software as a service), PaaS (platform as a service), and other similar models. The main advantage of these is that the solution provider is usually the one who maintains the system thanks to the work of its highly specialized IT teams.

With traditional on-premises systems, the FI typically has to hire a team of financial IT specialists and pay for the hardware needed to run the system. Although this is not necessarily a problem, in practice these specialists often have to do more than just maintain these local systems. This often results in less frequent updates and longer downtime for maintenance.

If your FI currently uses on-premises systems for basic TMS functions, upgrading to a new cloud-based system will almost certainly increase available uptimes and improve baseline system reliability.

Integration system

Better cross-system integration enables better data sharing across an organization. When a TMS is linked to another system, such as enterprise resource planning (ERP) or marketing automation software, it can use data from those networks to create more types of reports and use the next-level automation.

For example, money market forecasts on an ERP could be used to validate or complement the native capabilities of a TMS, allowing the organization to have a more nuanced view of currency movements. Pulling data from sales and marketing software could then help planners get a better idea of ​​the root causes of these market behaviors.

New TMS options generally integrate better with existing systems, especially if those systems are popular or were developed by the TMS vendor. Either way, the improved data visibility brought by better integration capabilities can go a long way to reducing an FI’s relative transaction risks.

Improved reports and forecasts

Reporting and forecasting features are very essential for FIs as decision makers will rely on them to make important transactions. Today’s TMS suites are typically designed for maximum data visibility, making it easier for executives and FI managers to decide on optimal transaction times with a high level of confidence.

The inclusion of better AI and ML modules allows some TMS offerings to create highly customized reports in just seconds, a huge improvement over older systems that sometimes take hours or even days to generate. similar reports.

Some AI and ML-enhanced TMSs can also integrate with an FI’s other systems, such as their ERP and payroll systems, allowing reports to be more comprehensive and contextualized. Such significant improvements in reporting, forecasting, and financial decision making make a good case for investing in an upgraded TMS.

AML and legal compliance

Various cash management activities are subject to government oversight, primarily for anti-money laundering (AML) purposes. As such, virtually every transaction carried out by a bank must adhere to laws and guidelines aimed at preventing money laundering and other criminal activity.

The list of government and interbank directives tends to grow longer each year. FIs must comply with all of this not only to protect themselves and the wider community, but also to maintain their reputation.

While you can often update older TMS solutions to meet compliance standards, it can become increasingly difficult each year. To avoid regulatory fines and reputational losses, FIs are now content to move to new cloud-based TMS systems where service providers handle the important compliance requirements. This allows FIs not only to avoid fines, but also to reduce their overhead costs.

Basic functions of the TMS

The main function of a cash management system is to help FIs and other organizations reduce the cost of routine transactions. Traditionally, this is done by manually reviewing different potential courses of action for a wide range of trade types. Software can help automate many of these processes, allowing cash management activities to be more profitable.

Updated TMS software can take this automation even further. AI and ML can be used to create dynamic and accurate forecasts of money and foreign exchange (FOREX) market trends based on historical data.

When implemented well, new TMS solutions can help organizations optimize their cash positions for every transaction for a given time period. FI managers can then use this information to automate transactions or execute them at the best possible time, thereby reducing the FI’s basic overhead.

Should you update your TMS?

Cash management systems are among the most overlooked when it comes to FI software updates. But the increased speed, reduced labor requirements, and dynamic data processing enabled by the new TMS packages can enable FIs to make significant improvements to their internal processes.

It should be noted that not all new TMS systems will work for your FI exactly the way you want it to. You should take the time to consider the capabilities and requirements of each option you have against your FI’s medium to long term needs. This way, you’ll increase your chances of choosing a cash management system that will truly help you achieve your organization’s goals.


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