GLOBAL - Nearly half (44%) of the world's largest institutional treasurers reported using some type of treasury management system (TMS) by the start of 2002, up from 36% 12 months before, while 48% of all large corporations use TMSs, also up from 36%.
These are key findings of recent research by Greenwich Associates.
The trend is particularly pronounced among institutions with over US$10bn in annual foreign exchange trading volume, where the percentage rose from 44% at the end of 2000 to 53% at the end of 2001. More than half of institutions trading between US$1-10bn use a TMS as well.
As companies become more sophisticated and risk management and reporting becomes more complex, the technological advantages provided by TMSs are ever more valuable and may prove indispensable to companies and institutions with sufficient volume, according to Greenwich Associates consultant Tim Sangston.
Designed to accommodate the ongoing centralisation of the treasury function in an era of globalisation, 24-hour trading, and changing disclosure requirements, TMSs have become a vital tool for large corporate and financial institutions, especially multinationals, as they track a multiplicity of often complex financing instruments.
Greenwich research revealed that SunGard is the system that has the most users by far of any single system, and particularly among corporate users.
But several systems with smaller client bases enjoy higher levels of customer satisfaction, specifically XRT-CERG, IntegraT, Simcorp, Chase Insight and other providers of specialised foreign exchange and risk management software, including Fxpress and Financial CAD.
Chase Insight and RiskMetrics were two systems that saw significant user falloff in 2001.
Consultant Andrew Awad said: “As treasury operations become more global and consolidate across geographies, many systems that had regional advantages are expected to either merge with larger providers or see their customer base erode.”
More than half (52%) of all large European institutions interviewed by Greenwich report using TMSs, and 57% of institutions on the continent. Both figures are up significantly from the prior year. Uptake in the UK is somewhat slower, growing only slightly from the prior year to 38%.
In the Americas, TMS use rose from 41% to 48% of institutions, with most of that increase (40% to 47%) in the US. TMS usage remained stable in Canada.
While use in Asia is lower than what is reported elsewhere in the world, it is a region of phenomenal TMS growth. A third of Asian institutions reported using some type of TMS, up from 21% in 2000. In Japan, the percentage of institutions with TMSs more than doubled, from 15% to 37%.
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