Pro’s Treasury for everyone

Treasury, perhaps because it is still considered a mysterious and complicated function, is often neglected or even non-existent in many entities, funds, or companies. However, no one can deny its usefulness and the benefits of a dynamic management of treasury and liquidities, financial risks, and an optimized banking relationship. We explain how to adopt professional tools easily with, if necessary, the support of treasurers.

Renewed interest in treasury

For various reasons, such as persistent negative interest rates, an economic crisis consequence of COVID 19, a sharp increase in fraud cases and cyber-attacks, a need for more efficiency and productivity and other technical reasons, there is a renewed interest in treasury management in certain industries (i.e., SME’s, Private Equity Funds, Fund Admin, Family Offices, …). No one can deny the difficulty of getting on-boarded by banks. For various reasons, banks are becoming more selective, in particular because of increasingly strict KYC requirements, increasingly cautious banks, a lack of profitability for certain clients (e.g., Private Equity Funds), the absence of a banking strategy among clients who disperse themselves by working with too many banks, and above all a lack of digitalization and banking connectivity (penalizing bank’s profitability). The customer is too often used to forget the interest of its banker. Forgetting the interest of its counterparty leads to a radical reaction from the latter. Therefore, let’s ask ourselves the question of how to get the banker’s favor and ensure on-boarding.

The solution to all problems

Yet, a smart and easy way to facilitate on-boarding by banks, to increase productivity in the management of front-office operations, to reduce financial costs and to mitigate operational and financial risks is to automate and digitize treasury management. The good news is that it is possible to implement simple, efficient, and automated treasury solutions at very low cost to facilitate and consolidate the banking relationship (given the savings on the banking side), while reducing costs and risks. The idea is simple: why not adopt an IT cash management tool like what multinationals use? There are platforms, in SaaS native mode, that can be implemented in a few weeks, which enable you to manage your cash flows and treasury operations in an efficient and effective way. The idea is to install a single bank gateway and to totally get rid of the tons of tokens in the drawers and remaining manual payments (via scan documents). You’ll think that having a high-performance vehicle at low cost (i.e., low implementation costs and reasonable monthly costs), is great. However, without a “driver” to manage the tool and the treasury, it may look complicated. Nevertheless, you can find a treasurer to manage your liquidities in “Treasury as a Service” mode (i.e., outsourcing), to achieve the same results as larger multinational companies, but a very low cost. We think of platforms such as FENNECH or STP, for example. And so, by setting up such a platform, with the use of an experienced treasurer in “rental” mode (subcontracting), a fund, a “family office”, a large SME can obtain the same performances as professionals of treasury.

A simple idea

The idea is to set up a native SaaS treasury management platform, a sort of APP’s store, with “à la carte” (customized) applications, to manage liquidities and FX like the largest multinationals. If you have any doubts, consult a treasury specialist who will analyze the return on investment and show you that such a platform will revolutionize your cash management and make you the banker’s best friend. Such a solution offers an impressive ROI, an ultra-fast pay-off and virtuous consequences.

By mixing and matching the applications and functionalities you need, you get the complete set of the perfect treasurer at low cost. If you add a “Treasury as a Service” solution, you get an efficient and unstoppable result. You will be able to manage your value date positions, invest your excess cash more prudently, more dynamically and more profitably, produce more relevant (tailor-made) reports, keep your bankers happy and improve your financial management by significantly reducing the risks of fraud. Not to consider professionalizing or “uberizing” your treasury management under the pretext of costs, complexity, or some complexes like “it’s not for me” would be guilty and a shame. By implementing an STP (i.e., Straight Through Process) the fund or family office will be able to automatically reconcile accounting positions, reduce costs and avoid any risk of payment fraud through digitalization and banking connectivity (via SWIFT). Who wouldn’t want to strengthen their internal controls? If there is a virtuous solution that is unquestionable, inexpensive, and easy to implement, it is this one. The qualitative and quantitative gains to achieve are immense and yet often ignored.

François Masquelier, CEO of Simply Treasury Luxembourg