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SaaS Technology A Medium for Treasury Change In the world of treasury and risk management, SaaS is a medium that has the transformative power to break down barriers and change the way groups across and beyond enterprise share information and create intelligence.

SaaS Technology - A Medium for Treasury Change

by Peter Seward, Vice President, Product Strategy, Reval

When Canadian visionary Marshall McLuhan coined the phrase, “The medium is the message,” in the 1960s, he didn’t know about Software-as-a-Service (SaaS) technology—at least as it is understood today. He didn’t have to. Rather, he understood that a medium itself can have a transformative effect on ‘human association and action.’ The light bulb, for example, transformed human activity because it no longer restricted activity to daylight hours. The automobile spawned suburbia, highways and the extension of time and space between work and home life. In the world of treasury and risk management, SaaS is a medium that has the transformative power to break down barriers and change the way groups across and beyond the enterprise share information and create intelligence. Taking a closer look at the medium, we can explore how the shared nature of SaaS technology, while not new, is enabling an evolution that will take the management of treasury in directions not yet thought of.

From shared data to shared services

The conventional view of SaaS as a convenience is well understood, as it is in the example of online banking. It is even appreciated for its enablement of sharing public data for the benefit of all users, as with online newspapers. What is less understood, however, is where SaaS is headed, and what is driving the direction of change.

The SaaS world is hosted. Partially shared, partially private and fully secure. Decentralized and subscribed to - no longer is it necessary to buy servers, make backups, check security, and endure painful roll outs and upgrade cycles. Your access is anywhere, anytime on a single version, which is regularly upgraded and in compliance with the latest regulatory changes. Your treasury organization is no longer bound to IT strictures, other than a tick in a RFP box, leaving you free to fully exploit the opportunities inherent in the SaaS medium.

Consider, then, how the consumption of information by users across the treasury spectrum – from positioning cash, processing payments, monitoring credit lines and making inter-company loans to generating valuations, performing advanced risk management and posting accounting entries – is driving an evolution from shared data to shared services. This evolution toward shared services means more work is automated and provided by your SaaS partner, saving you time and money.

Shared treasury data

Over the past decade, SaaS technology made it easy for a provider to leverage common, public data, for the benefit of all users. In the treasury world, some of this data includes:

  • Market Data – You need market data, though it may vary from your neighbor. SaaS providers sourcing and publishing your market data enable independence (a plus with auditors), wide coverage and validation of data accuracy. FX and interest rates are used throughout treasury, from translating cash amounts to functional currency, valuing FX transactions, creating journal entries, and performing stress tests. The 30 minutes you spend per day sourcing, checking and publishing market data could result in three weeks’ annual savings and a lot fewer headaches with this centralized task.
  • Market Conventions – You all need to define and maintain everyday data, such as currencies, holiday calendars, day count conventions, country codes, bank statement formats, and payment message formats. While this task is the same for everyone, it takes time and effort to install and keep up with market standards. The recent Royal Wedding holiday is an example. Vendors supplying this data will have reduced your effort and guaranteed that market standards would be followed. With thousands of eyes on this data daily, you would rest assured that a vendor of a true, multi-tenant SaaS would know of mistakes or errors very quickly.

As SaaS platforms continue to add more functionality, the leveraged value of centrally provided market data increases.

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