Revolutionise Your Treasury: Designing a Seamless Treasury Operating Model


Importance of Designing a Seamless Treasury Operating Model

Designing a Seamless Treasury Operating Model is of paramount importance for organizations seeking efficient and effective management of their financial resources. By carefully structuring the treasury functions, processes, and systems, companies can streamline cash management, optimize liquidity, and mitigate financial risks. A well-designed treasury operating model enables seamless integration of activities, enhances decision-making capabilities, and ultimately contributes to achieving strategic financial objectives.

Step 1: Assessing Future Service Capabilities and Activities

Understanding Treasury Processes

Moving from an existing TOM to a new platform is much harder than starting from scratch – like remaking an aeroplane in flight. The early phase of this project is the need to map out the systems, people and processes landscape – disrupting everyone in the process. Find a way to de-stress the involvement of BAU staff by adding additional support to allow people the time to work on the mapping process, or else provide free pizza (other snacks available) to show appreciation of their efforts!

Identifying Asset Class Coverage

An essential aspect of designing a seamless treasury operating model is identifying the asset class coverage. This involves determining the range and scope of financial instruments that will be included in the model. By carefully evaluating and selecting the appropriate asset classes, organizations can ensure comprehensive coverage and effective management of their treasury operations. This step is crucial in establishing a robust operating model that aligns with the organization’s financial objectives and risk appetite.

Given the emergence of crypto assets and demand from investors for new assets and markets – looking for flexibility in your systems is important, but hard to prove. Every system vendor will claim they can adapt to new assets, but what you need is clarity and precise detail on when and how this will take place.

Mapping Internal Functional Teams and Locations

Mapping internal functional teams and locations is a crucial step in designing a seamless treasury operating model. By carefully aligning the different teams within the treasury function and determining their optimal locations, organizations can enhance efficiency, streamline processes, and improve decision-making. This strategic approach allows for better coordination, communication, and collaboration among various stakeholders, ultimately leading to a more effective and integrated treasury function.

Step 2: Exploring External Partnerships and Platforms

Finding Partners for Component Services

Finding Partners for Component Services to build your treasury operating platform is crucial in designing a seamless treasury operating model. By identifying and collaborating with trusted service providers, you can leverage their expertise and technology to optimize your treasury processes. This approach allows for a tailored and efficient solution that integrates various components into a cohesive operating model, enhancing liquidity management, risk mitigation, and overall financial performance.

The usual buy, build or outsource decisions loom at this point – for most firms ‘build’ is just too big a project with too much risk. In which case you need to look carefully at a combination of buying the platform or services you need, and consider whether some or all of that platform is operated in your behalf by third parties. And you might want to think of an escape route should your primary choice turn out to be a dead end!

Utilizing Cloud Solutions

Utilizing cloud solutions is essential in designing a seamless treasury operating model. By leveraging cloud-based technologies, organizations can achieve enhanced agility and scalability, enabling real-time access to critical financial data and streamlining treasury processes. Cloud solutions offer robust security measures, ensuring data integrity and compliance with regulatory requirements. Implementing a cloud-based treasury operating model empowers professionals to optimize cash management, improve risk management, and drive overall operational efficiency in a secure and scalable manner.

The cloud is all well and good, but introduces new risks – depending on your mission critical processing taking place on servers outside your control. Many firms will look for a platform which maintains a ‘hot standby’ with a duplicate set of systems hosted in an entirely different physical location. Even if Amazon or Microsoft promise closer to 100% uptime, there are cases where well prepared server installations still fail – batteries that don’t work, generators that don’t kick in, or in the case of OVH in Paris the entire building burned down.

Avoiding Manual Processes for High Levels of STP

When designing a seamless treasury operating model, it is crucial to prioritize the avoidance of manual processes and strive for high levels of straight-through processing (STP). The goal should be to automate all processes and establish direct data feeds between systems. By doing so, the model can minimize exceptions that necessitate human intervention, leading to increased efficiency and reduced operational risks.

Every exception you accept, which requires manual work, becomes a permanent fixed cost and a constraint on growth in the future. When you look around your back office and wonder why you employ so many people, it’s usually exception processing that drives headcount.


Summary of Key Points

Designing or re-design your TOM is a massive undertaking. You are trying to combine complex processes, high speed processing, high process risks and complex external touch points. Despite the brilliance of your internal people – bring in third parties who can bring a simple perspective : what worked elsewhere – and what didn’t. Avoid the bear traps everyone else falls into and pick a proven route to efficiency.

Benefits of a Seamless Treasury Operating Model

In the fast-paced world of finance and treasury management, a well-designed operating model is essential for ensuring efficiency and success. This blog post serves as a comprehensive guide for professionals seeking to create a stress-free treasury operating model that maximizes productivity and minimizes risk. With a focus on treasury operating model design, we will explore key strategies, best practices, and essential considerations to help you streamline your operations and achieve optimal outcomes. Whether you’re a seasoned treasurer or new to the field, this guide will provide valuable insights and actionable steps to enhance your treasury operations. So, let’s dive in and discover how to achieve a stress-free design for your treasury operating model.

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We’ve done a ton of these projects for firms like yours – we tore our hair out some time ago so that you don’t need to. Get in touch and find out how we can fast-track your firm to a high efficiency operating model!