Should Corporate Treasurers worry about sale of IT2 to Wall Street systems?

05 February 2013

Wall Street Systems (WSS) acquired a leading treasury management system (TMS) vendor IT2 Treasury Solutions Ltd on 11th January 2013. This raises a number of questions for corporate treasurers – will WSS continue to support IT2, City Financials and other products and provide regular upgrades? Will WSS ask clients to migrate to a different and more expensive TMS product once the current TMS contract expires? Has the TMS market become less competitive with two vendors Sungard and WSS owning a number of TMS products?

PwC has the view that the software sector has always seen M&A activity. WSS is IT2’s 5th owner. Change is “normal” in the TMS software market and IT2 could benefit from bank trading products in WSS’s portfolio. Software vendors do rationalise their product portfolio. Corporate Treasurers should be prepared for change, review their current technology requirements and build a relationship with the new IT2 owner.

IT2 started off life as ‘MicroTreasurer’ developed by Swallow Business Systems in 1982, was sold to Bank of America in 1985 and rebranded as ‘International Treasurer’ – “IT”. The product name was changed to IT2 when the operating environment changed from DOS toWindows and was sold to Simcorp in 1999. CapMan acquired it from Simcorp in 2007 and sold it six years later to WSS in 2013.

Most Corporate Treasurers would be aware of the M&A activity in the software sector and the sale of a TMS vendor should not set alarm bells ringing. In the treasury management system market, there have been 10 transactions in the last few years. WSS has acquired City Financials, Treasura, Speranza (EBam) and Trema (who in turn had acquired Alterna and Richmond). Sungard has acquired Integrity and Trax, while Reval has acquired EcoFinance and Misys has acquired Crossmar. See the TMS history below. According to industry reports, there were over 1500 M&A transactions in the software industry in 2012 worth over $60 billion with Google, Groupon, IBM and Facebook leading the way.


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We believe that a key question to think about is whether the product or the vendor matters more to the Corporate Treasurer. A typical TMS request for proposal (RFP) questionnaire has far more questions checking the suitability of the product to meet treasury requirements compared to questions assessing the financial stability of the vendor selling the product. Even a leading vendor would struggle to sell a poorly designed or poorly supported product which does not meet customers’ requirements.We believe that whilst the strength and intentions of the vendor are considerations, the product should come before the vendor when selecting or reviewing software.

There are a number of potential positives in the deal for the Corporate Treasurer. WSS has $100m+ sales as compared to £20m+ sales for IT2, bringing it more financial stability.WSS has previously built an ecosystem of interfaces around WSS Treasury with Reval for hedge accounting, Fides for payments, EBam (Speranza) for bank account management, Misys for confirmation matching and 360T for electronic trading. IT2 could benefit from rapid porting of these interfaces. WSS also has higher end products in its portfolio likeWall Street FX, backoffice and Strategic Corporate Treasury (ex-Trema). IT2 could potentially benefit from experienced developers, financial models and functionality software libraries.

That said reduced vendor choice could lead to less competition and higher prices at least until the alternatives develop further. Software vendors often rationalise the portfolio by asking customers to move to a more profitable product. The pricing model followed by WSS is thought to be different to the one used by IT2.WSS has a significant product overlap with IT2 andWall Street City Financials both providing similar functionality as it is the case with Wall Street Treasury (ex Richmond) and Wall Street Treasura (ex Thomson Reuters).Whether WSS will continue to support both the products it has acquired remains to be seen.

We believe Corporate Treasurers should review their TMS product and vendor requirements and reevaluate their relationship with the new owners of IT2. They should read the legal contracts, renewal clauses and pricing schedule, and set up a meeting with WSS to review the relationship. Every change brings with it opportunities and risk.


Sanjay Bibekar
Contact via email
Tel: +44 (0) 20 780 49582

David Stebbings
Contact via email
Tel: +44 (0)20 7804 2323


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