This article was original published on July 8, 2008 on www.gtnews.com
Jim Etten, Managing Director of Cachematrix
This article argues that the integration of cash portal trading systems into existing treasury workstation should not be a barrier to effectively managing treasury.
A couple of years ago, the treasurer of a large oil and gas company was looking for a better way to manage his corporate cash. What this treasurer wanted was to have all pertinent trade and reporting information feed automatically into the company's existing treasury workstation environment. What this treasurer needed was to manage his company's investments through a web-based money market trading portal. Of course, given the complexity of treasury workstation systems - and the potentially high cost associated with fully integrating outside applications - treasurers are understandably cautious when it comes to allocating dollars and internal resources to what should be simple technology solutions.
In the end, the aforementioned treasurer and his oil and gas company adopted a bank portal. The corporation now has a better method to manage cash positions using a robust money fund portal, while simultaneously monitoring currency fluctuations and positions from a single workstation. And, in this instance, it was completed with no cost to the corporation.
At their core, treasury workstations are designed to allow companies to automate most core treasury operations from debt and investment services, to maintaining access to capital markets, to generating reports from internal and external accounting systems. Workstations provide a 24/7 link to financial institutions, seamlessly providing database access and direct communications.
In many cases, cash management has been somewhat of a laggard in the treasury management automation trend but that is changing. In fact, a growing number of corporate treasurers are turning to institutional money market fund portals to invest their cash in money funds. Like the 'supermarkets' that revolutionised the mutual fund industry in the mid-80s, money market portals are providing treasurers with a choice of competitive funds and a convenient, single-source platform for managing them.
According to an article in CFO.com1, portals provide treasurers with access to current portfolio holdings performance, prospectuses, wire information, fund applications, and more without leaving the centralised website. Furthermore, portals provide password protection and a neat paper trail for managers who are required to comply with the internal-controls documentation provisions of Section 404 of the Sarbanes-Oxley Act. But as they adopt new cash management solutions, treasurers need to bring these systems into the fold, integrating all aspects of treasury management into a single workstation. That's where a web-based solution comes in.
According to a November 2007 US Banker article, banks are a natural fit to provide web portals for institutional funds. In fact, portals are a key differentiator for corporate banking. "Most big banks will eventually be offering something like this as an extension of their cash management and sweep accounts," says Peter Crane, president and CEO of Crane Data.
Indeed, Chicago-based LaSalle Global Trust Services, now part of Bank of America, began using the portal product powered by Cachematrix two years ago, says Brian Davis, First Vice President of Global Securities & Trust Services. Before that, the bank would handle things manually, he says, literally seeking out fund-company prospectuses and sending them out to clients. Davis views institutional money market funds as the last gap in serving institutional clients. "This was a hole in the suite of corporate client services," he says. "Many of them have been going directly to the mutual funds and not using the bank."2
In fact, portals are helping treasurers fill the gap in several ways:
What really matters is whether treasurers have the tools with which they can most effectively manage their cash and have accountability over their reporting. In today's technology driven world, seamless integration of cash portal trading systems into existing treasury workstation should not be a barrier to effectively managing treasury operations.
References
Trombly, Maria, 'Pre-trade Compliance: Better, Cheaper, Faster - Firms answer regulatory, investor demands with added controls and third-party systems', Security Industry News,
18 February 2008 Kite, Shane, 'Money Market Funds: Speed Always Wins; A treasurer's heart Web-based platforms that quickly aggregate funds through portals are gaining favor,
winning interest from Comerica, the Bank of New York, Wells Fargo and Mellon', Bank Technology News, 1 July 2005, Vol. 18, No. 7.
About Cachematrix Holdings, LLC
Cachematrix is the leading financial software provider (SaaS) of on-line institutional trading systems for banks and
financial institutions worldwide, providing turnkey solutions for money market portal technology, as well as fixed income
and variable NAV trading systems. Cachematrix enables banks and other financial services firms to offer its corporate
clients on-line access to a choice of institutional funds and a convenient, single source platform for managing them,
including access to comprehensive analysis, online trading, and account management.
