FinTech like blockchain, treasury and trade finance systems, B2B payments are bringing a paradigm shift in the financial services market and even in the economy. Markets like India, China, and Japan in APAC are seeing major growth in this sector. According to McKinsey, the FinTech market for Corporate Treasury, B2B Payments and Cash Flows is at $135 million.
Financial and other organisations globally are now incorporating automation as an inherent process in treasury management. This is where FinTech solution provider IBSFinTech comes into the picture. The company specializes in niche and innovative solutions for corporate treasury, forex and trade finance, with emphasis on risk management.
The company sees a great potential in the Indian market, where there are over 6200 organisations with a turnover of $74million that depend on Microsoft Excel for their treasury management activities. This data clearly reflects that there is tremendous scope for adoption of technology in treasury management. Chandra Mohan Grover, Co-Founder & Executive Director, IBSFinTech tells HPC Asia how this FinTech can impact businesses in a big way. Excerpts:
How do you see FinTech revolutionising the traditional financial services scenario?
FinTech is playing a crucial role in shaping up the financial services sector. FinTech has proven its mettle where the traditional financial institutions have failed. A recent report by PWC estimates that within the next 3-5 years, cumulative investment in FinTech globally could well exceed $150 billion.
It would not be wrong to say that the traditional financial services are facing technological changes which are bound to modify the way organizations do business; all this is highly dependent on the FinTech Revolution.
With the advent of technology, FinTech is maturing and receiving support from the Financial Services Sector. Accelerator and Incubator programs are being set up globally to fuel the growth of FinTech industry.
What are the kinds of technologies that you see will bring a change in this market?
The FinTech Industry is evolving and growing manifolds creating its own space in the Industry. A recent survey by PWC has indicated that three FinTech segments have showcased more growth than others, and these three segments include, Cloud & Core Processing Solutions, Artificial Intelligence, Big Data, Blockchain Customer Segmentation and Product Personalization Solutions.
We feel that the real success factor behind FinTech industry will be real-time integration between the age old legacy systems and today’s latest technology functions. The development and growth in silos will be detrimental for the industry.
What is a treasury management system? How does this help a financial services company?
A Treasury Management System is a software product which supports the key stakeholders, CXOs, treasury department in an organization and helps them to automate, record, and control the core treasury functions. An ideal TMS would be affordable, capable of handling multiple asset classes, have real time interface with multiple trading platforms and markets and integrate seamlessly with organization’s transactional systems. TMS provides the advantage of sophisticated derivatives such as Options and Futures (multiple varieties thereof).
Usage of a well-architected, comprehensive, integrated and real-time TMS solution is not limited to financial services company, but extends beyond to every organization across industries which are impacted by the volatile market conditions.
What are the aspects of treasury management system and what processes does it take care of?
A Treasury Management System should be robust, scalable, comprehensive and integrated to offer an end-to-end solution for a treasurer to have real-time access to critical data. This enables a treasurer to have real-time insights into forex exposure, cash visibility, and liquidity.
A TMS facilitates single moment of truth for the CXO’s, senior management and key stakeholders. In addition, a TMS automates end-to-end treasury operations of an organization; helps integrate the treasury department with other departments in the organization which is responsible for providing inputs to the Treasury department such as Purchase, Accounting etc.
How can an organization go about adopting a treasury management system, and for that will they need to overhaul their IT setup or can it be integrated in legacy systems?
The first step in the adoption of TMS is to identify the requirements of the organization regarding Treasury Management. Next step will be to identify the right Treasury Management System for the organization that suits the requirements. Most available TMS are extremely complex, require long implementation time and involve steep learning curves.
A recent survey by Bloomberg highlighted the fact wherein 74% of global organizations with revenues less than $250 million do not leverage a TMS for treasury management. Excel sheets and archaic systems still rule treasury systems of multi-billion dollar corporates. Several companies with over $10 billion forex exposures are still managing Forex with Excel utilities!!
Perhaps, single most reason for lower technology adoption could be the unavailability of simple but holistic TMS (Treasury Management System).
Today, most of the TMS available in the market work in silos and depend on the legacy systems to integrate with the TMS installed. But that is where we are trying to make a difference – a high level of customization. So, the organizations need not overhaul their complete IT system for integrating the TMS.
What is your USP? Why would an organization go for IBSFinTech’s TMS solution?
Currently, there is a void in the industry for providers offering integrated, comprehensive and intuitive TMS. There is no one solution available in the market which is cost effective as well as provides an end-to-end and integrated treasury management solution covering Forex, Investments, Commodities and Trade Finance Management. That is where we come in with an integrated, flexible, customizable system that is designed as an intuitive product portfolio that facilitates a complete ecosystem of treasury management.
For instance, our Innovative Treasury 5.1i is a customizable, comprehensive and integrated TMS that can be easily integrated into the organization’s legacy IT system. It offers intuitive dashboards and more than 100 reports to enable the key stakeholders to look at their consolidated hedge positions across business verticals and locations. The system helps the treasurer access real-time insights on predictive analysis, scenario-based projections and more using the variety of reports and dashboards available in the system. The solution also supports real-time alerts and notifications which are useful for the treasurers as well as the key stakeholders in senior management.
Our products are continuously evolving to support volatile business environment and providing DSS (Decision Support System) along with analytical tools to stakeholders. Also, our systems function efficiently across geographies, currencies, and markets as the associated risks are same across the globe. With few customization and configurations during each implementation, the product adapts to the company process and country specific compliance requirements.