Treasury Technology Catches Up With the Hype

Corporate treasury departments use the Internet primarily to obtain information and to perform simple activities, such as cash management. But some say that's about to change.

Like everyone else in business today, corporate treasurers have become deeply and undeniably dependent on the Internet. However, most of them rely on it only for select functions such as cash management, the exchange of information with financial service providers and activities with low operational risk. The Web hasn't had as rapid or dramatic an impact on treasury operations as was anticipated when it made its business debut in the 1990s.

"In the beginning, everyone thought the Internet would immediately revolutionize the cash management business, but that never really happened," explains Michael Fossaceca, senior vice president and large corporate sales executive, JPMorgan Treasury Services, New York City. Yet "the Internet has proven to be another delivery channel and is starting to take hold in terms of how treasurers execute their work and automate manual processes."

Tom Morrison, vice president of products for Selkirk Financial Technologies Inc., a Vancouver, British Columbia-based workstation provider, concurs. "The speed at which treasury solutions have moved to the Internet has been slower to evolve than the industry had hoped," he says. "Now we're able to realize the global deployment dream, but it's just now catching up to the hype of a few years ago."

Vendors universally cite the speed with which treasury software has migrated to the Web as the technology's biggest disappointment, but Michael MacIntyre, treasurer of Hexcel Corp., a multinational manufacturing company based in Stamford, Conn., says the speed of data transmission over the Internet has failed to lived up to his expectations. "It's not as quick as I thought it would be. The dial-up we had previously was slow, and when we moved to the Internet, I thought it would be so much faster, but it's not really. You still have to wait for the pages to load," he says.

MacIntyre uses a Web-based, third-party treasury workstation to compile his company's daily cash position. The workstation queries the bank before the start of the business day and offers hourly updates, but MacIntyre isn't convinced that the promise of real-time information has been fulfilled. "It's not as fresh as I thought it would be," he says. "When I'm traveling and I have to check a number and take some action, I don't have a lot of time. I want the information updated and there when I need it. I don't want to wait for the next refresh."

Meanwhile, others complain that as banks have moved from client-installed software to Web-based delivery, some have failed to keep information about past transactions readily available. "When the Internet first happened, banks thought everything would be real-time: real-time statements and real-time payments. But there are many treasury operations that still rely on prior-day information for reconciliation, and certain banks don't give their clients access to prior-day statements," says Bent Benjaminsen, senior vice president of strategic initiatives for Wayne, Pa.-based treasury workstation vendor SunGard Treasury Systems Inc.

Another shortcoming of banks' Web-enabled systems that Benjaminsen cites is their inability to download incremental data. "You may want just the five or six trades that occurred since you last logged on, but you have to take the whole set of information every time, which is very inefficient," he says.