SunGard Treasury Management Systems is hoping to break into the financial services arena with AvantGard-Liquidity Express, a solution that overlays existing systems and is intended to give an enterprisewide aggregation of risks, exposures and trade balances.
Bent Benjaminsen, svp of strategic initiatives at SunGard, says the software giant has had in-depth discussions with two large banks, a major broker-dealer and several insurance companies, and it's hoping to get the green light soon. "We have the name and credibility on the corporate side, and I think it takes a little time to earn that on the banking side. And the decision making on the banking side is a bit longer. But we hope to hear soon. It would be a whole new area for us."
What Liquidity Express is intended to do is turn the typical downstream treasury management model on its head and push that information out enterprisewide. That way, if a portfolio manager in Europe takes a position in Swiss francs, for instance, the suits in New York can assess
that risk alongside their exposure to another currency such as yen.
The underlying premise, Benjaminsen says, is that "somewhere, someone is making a decision that affects me. Others want to know this information, and while they could wait and hope that they are eventually told, that doesn't always happen within firms. ...Their complexity is trade oriented, but to us it's all just cash flow and it's indifferent from our perspective what they're doing."
What's attracting the interest of the financial institutions is the kind of functionality already being enjoyed by some of SunGard corporate clients. One major automotive supplier, using AvantGard Liquidity Express, can collect bank information daily from 70 banks worldwide, view transactions from 8,500 accounts, accommodate 700 users, and provide daily rate feed from more than 50 currencies. "In the case of a financial institution, instead of pushing out information to a user in Indonesia, their 700 users are trading systems," Benjaminsen says.
Despite the deep potential market in helping banks and other financial institutions aggregate risk and spread that information out across a global enterprise, Benjaminsen says SunGard is treading carefully.
"Banks have told us, 'We spent five years trying to do this, and we still don't have it.' And that's a bit scary," he says, adding that implementing the Liquidity Express solution at the institutions he's talking to would take five or six SunGard employees about two years. "What takes time is getting information from all the sources and making sure all the data is normalized. It's what banks have been trying to do for years."
Jeanne Capachin, a research director at Financial Insights, says one of the reasons the SunGard treasury management solutions are getting a close look by corporations as well as financial institutions is that SunGard is taking essentially commoditized services and making them "modular" and thus interchangeable.
She explains that these modular products can be plugged into their four or five core AvantGard treasury management products so each client can pick and choose the way they want to bring together and view information from within and from without the organization. "They're creating dashboards for CFOs and treasurers. They're developing customized solutions and providing information in just the way they want to see it." Capachin says. "It's a vision of treasury management that makes a lot more sense than continually selling packaged solutions."
Such modules include risk management, multi-lateral netting and bank communication. What's more, Capachin says, because of the size of SunGard, its treasury management solutions branch can tap other areas of the organization to adapt these modular solutions. "They can do internally what others can only do through partnerships," she says.
