HCLTech’s Digital Treasury as a Service
With the pace of growth and regulations in treasury management, the role of treasurers in supporting strategic business objectives is amplified. Treasurers across the world are looking to streamline treasury operations by creating a cost-effective platform to unlock new opportunities. Digital transformation in treasury will set the treasury agenda of the future.
HCLTech’s Digital Treasury as a Service is a proven, best-in-class, outcome focused solution that helps treasurers to reduce operating cost, lower time to market, and improve risk management with secure and future-proof treasury operations.
Business Situation
- Shift from CAPEX to OPEX not only reduces total cost of ownership, but also conserves and optimizes cash resources
- Hosted models and managed services have been a preferred choice across the industry
- Acceleration in cloud technology adoption to achieve business agility, innovation and operational efficiency
Source: https://www.bcg.com/en-in/publications/2019/creating-digital-treasury-banking
Treasury Management Challenges
Liquidity Management amid uncertain environment
Changing Environment:
- Covid-19 has significantly increased the volatility across asset classes
- This highly uncertain environment demands treasury functions to operate with higher levels of liquidity
Impact on Treasury:
Treasury can make best use of volatility in market conditions to reduce cost and increase revenue opportunities.
- Treasury teams need to be more agile than ever and manage risk efficiently
- Real-time visibility of liquidity and cash management is of paramount importance
- Front to Back Office integration help teams to collaborate and work efficiently, and helps leadership with prescriptive analysis and faster decision making
Regulatory changes
LIBOR Transition:
- The ARRC (Alternate Reference Rate Committee) was formed to replace LIBOR (London Interbank Offered Rate) and all banks must transition from LIBOR to the new ARR by the end of 2021.
- Different calculation methods between currencies is set to add complexities to the Treasury functions.
Impact on Treasury:
- Treasurers need to assess the impact of LIBOR transition and prepare a comprehensive strategy to adopt new ARR / RFR (Risk-free rate)
- LIBOR transition is expected to impact processes such as valuation of financial instruments, refinancing, additional liquidity to cover interest rate movements, operational risks of renegotiating large volumes of existing LIBOR-referenced contracts to new rates.
Thus, banks need a robust and scalable treasury management system to address these challenges.
Mergers and Acquisitions
The Pandemic and market volatility has significantly increased the risk for banks which may continue to vary decisions to look for strategic partners to create best of value for shareholders.
Impact on Treasury:
- Integration of IT systems play major role
- Treasury systems are often left for later stages of integration
- Misalignment in working capital and increased cost in trying to fix the deviations
- Difficulty in having complete visibility of combined companies’ cash flow movements, liquidity and cash needs in short to medium term
- Problems in analyzing cash management strengths and weaknesses to effectively support combined businesses and hedging strategies according to risk profiles of both entities.
Thus, it is important to have a Scalable Treasury Management system (TMS) which can be integrated easily with ERP systems and external market vendors to track and monitor the key functions on daily basis across bank accounts, cash management, risk, regulatory and legal.
Cashflow forecasting
- Clear view of organization’s liquidity is required to ensure cash requirement at all times
- Lack of automation is a key challenge to review forecast variance and analyze any potential deviation
Accurate and reliable cash forecasts are critical for decision-making in key areas such as capital budgeting, long-term financing and strategic investments. Designing a robust cash flow forecasting using Predictive analytics will improve forecasting accuracy.
Risk Management
- Traditional treasury platforms lack a holistic view of risk exposures
- Lack of ability to manage exposures intelligently will increase the treasury risks.
Proactive monitoring and measurement of risks using an optimum framework is the key to appropriately manage risks and achieve strategic goals
Key Outcomes: Digital Treasury as a Service
Solution Accelerators
Modern user experience: Web-enabled and customizable workspace-based application for improved decision making, live market data feeds and position updates and enhanced graphical capabilities for better data visualization.
MS Azure Cloud: Transform to cloud on a SaaS model, hosted on an MS Azure Data Center with a single point of ownership with HCLTech
ALT ASM Framework: For production support, continuous improvements and productivity benefits
HCLTech PEAK™ (Process Enhancement Automation Kit): A test automation framework that helps in reducing testing time by 60%
Key differentiators
Integrated platform
- A full-stack, integrated Finastra Fusion Opics solution on MS Azure Cloud
- Highly automated cloud foundation
One-stop-shop for Treasury as a Service
- Fully managed by HCLTech
- Reduced TCO for financial institutions
World-class platform and services
- A proven treasury platform with over 180+ live implementations
- 40+ engagements by HCLTech with implementation and services
Evergreen
- A continuously updated treasury platform
- Be updated with regulatory changes
Resilient and scalable
- A resilient and scalable platform
- Supports both business and technology scaling
Insights & News
Strategic Partner for innovation and Tranformation
ADM and Analytics offerings
Challenges:
Rapid growth, increase in volumes, and the bank treasury mostly relying on spread sheets and fragmented systems.
HCLTech Solutions:
- Quick to implement software
- Front to back treasury assistance with multi asset support
- Ability to scale to growing volumes
- Seamless back-office operations with FX splits, netting and CLS
- Nostro management
- Best of the breed client confirmation management
Business Benefits:
- SaaS provided an extension of the bank’s IT team
- Lower TCO and faster time to market
- Front to back integrated treasury