Treasury management is a complex undertaking that encompasses a company’s financial affairs. It is too important to leave to manual, spreadsheet-based processes and one Indian company has ambitious plans to automate those companies still using manual processes.

Treasury management encompasses all of the financial affairs of a company, from raising funds for the business from various sources, currency management, managing and monitoring cash flows through to managing multiple strategies and procedures of corporate finance. Treasury management processes help companies to optimise current and medium-term liquidity and make financial decisions with the invested assets along with hedging assets to reduce financial risk exposure. More than 70% of companies globally rely on Excel spreadsheet or legacy enterprise resource planning (ERP) solutions for treasury management. As a result, they are more likely to incur significant losses in periods of market volatility compared with those companies that more use advanced treasury technology. One of the significant reasons companies do not replace these legacy systems with newer technology is a lack of awareness of what is available. Other factors include pricing and a lack of choice in terms of technology solutions.

An Indian company, IBSFINtech, is trying to solve these problems. The company provides a comprehensive and integrated suite of solutions across all asset classes for companies, not only in India but also globally. The company is now expanding its reach by entering the cloud-based solution space. The Bengaluru-based company offers solutions at competitive pricing, compared with the globally established players such as SAP, Kyriba, FIS, Oracle and Capix.

With its proprietary Innovative Treasury and Innovative Trade Finance solution, IBSFINtech can handle any treasury-related challenge in real time. The company manages treasury market transactions totaling more than $20 billion for some of the leading Indian companies including Maruti Suzuki, HCL, Snapdeal, JSW and the Future Group. The company plans to close deals with around 20 companies across different sectors by the end of March 2020. In reaching that target, the company expects to achieve $3 million in revenues in the financial year 2020. This would represent 500% growth compared with the current year.

Chandra Mohan Grover, a former banker with public sector lender Vijaya Bank and one of the founding members of IBSFINtech, says: “Corporate treasury management is critical and is constantly evolving. However, chief financial officers and corporate treasurers in very large corporate houses still use spreadsheets to manage treasury. This exposes their companies to a host of operational risks, loss and inefficiencies that slow down processes. Hence, companies need to invest in newer technology to transform their treasuries. Automation and digitisation will mitigate risks and also deliver efficient risk management.”

Expanding horizons

 To date, IBSFINtech has been focused on the Indian market; however, more recently it has attracted interest from further afield. There is still untapped potential in India, though – more than 6,000 companies in the country depend on Excel spreadsheets to carry out treasury management tasks.

“We are witnessing rapid growth in our client base in the past few years as several companies are becoming aware of the need for a robust treasury and risk management solution and they are ditching the old spreadsheet method for managing treasury, risk and trade finance activities. We have been focused on changing the perception in the market and have largely succeeded in doing that by creating visibility for a Make In India product in the global treasury market,” says Grover, who founded the company with his former colleagues T M Manjunath and S Sethuraman, all of whom have rich technical and domain expertise. Make in India is an Indian Government initiative, launched in 2014 and aimed at encouraging companies to manufacture their products in India. It covers 25 sectors of the economy.

Having raised a seed funding from Shailesh Haribhakti, chairman of risk advisory, auditing and tax consultancy firm Haribhakti & Co, IBSFINtech is in talks with other global investors to close a $5 million round by the end of this year to fund its overseas expansion. The company has already made forays into the ASEAN region and is looking to expand into the Middle East and Europe next year. “We already have bagged a big client in Singapore. In the past few years, we have been replacing the SAPs of the world with our comprehensive and integrated treasury, risk and trade finance management solution,” says Grover.

The solutions provided by the company cater to the end to end requirements of today’s treasuries, including currency, investments, commodity, borrowings, cash flow, valuation, interest rate derivatives and trade finance management. The solution integrates with the existing IT infrastructure of a corporate and offers a robust decision support system for users, especially senior level executives to ensure more control and visibility into the treasury and trade finance operations.

Helping SMEs grow faster

The company is now looking to tap India’s growing and thriving small and medium enterprise (SME) segment, as Grover feels that with the Indian Government’s effort to create a digital economy, the SMEs are also looking for technological solutions that could help them grow faster.

“Automation and digitisation are essential in today’s world. We are launching a cloud-based software-as-a-service product for SMEs in the fourth quarter of this financial year [2019] at a very affordable price. We did a complete study of the requirements and pain points of the SMEs and selected the features of this SME-focused cloud solution to address those pain points,” Grover says.

The company is targeting SMEs with a turnover of INR1 billion ($14 million) that are managing treasury operations manually on spreadsheets. Such companies are unable to capture price movements in currencies, investments, bond trading and financial derivatives. According to Grover, there are about 40 million such SMEs in India and about 40% of the exports that these SMEs carry out contributes to about 4% cent of the country’s gross domestic product. This represents a significant opportunity for companies such as IBSFINtech.  Definition of MSMEs in India (As per Micro, Small and Medium Enterprises Development (MSMED) Act, 2006)  Image here

Article by

Priyanka Pani

Regional Correspondent – Middle East and Asia, IBS Intelligence

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