The Treasury operations of Hungarian Financial Institutions are supported and enabled by the two different approach: either with the help of a group-wide solution (mainly hosted by the Group Head Office) or with an on-site solution which runs on the Banks’ own infrastructure. One of our clients was operating on an outdated Treasury Management System (TMS) which was only running on an infrastructure which lacked official enterprise-grade support. Due to legal obligations, all Financial Institutions in Hungary must operate on infrastructure that has proper support and maintenance services available, our client had to rethink it’s strategy on Treasury-related systems and applications. The board decision was to carry out a Request For Proposal (RFP) process in order to gather information about the costs of upgrading to a newer version of the current TMS or introduce a brand new. Advocate consultants were in charge of preparing and evaluating the RFP.

Assessing the needs and requirements of all the Treasury-related departments

Prior to starting an RFP, a clear picture of the Treasury’s and related departments’ role in the Bank should be defined. For a succesful RFP and eventually for an implementation project, stakeholders should include carefully weighted and selected business requirements in order to determine the critical requirements of the new system. Since no Treasury operates on its own, many different stakeholders had to be interviewed (e.g. Market Risk, Treasury Back Office, Regulatory Reporting and Compliance departments) and many business processes had to be analyzed in order to get the full picture how the client operates and what would be the future needs.

Assessing the needs and requirements of all the participating departments was a meticulous task which focused on the following:

• Getting a detailed list of business requirements for executing the next 5 years’ Treasury strategy: the Treasury product managers and the Head of Treasury had a very clear and defined strategy for the next 5 years, which would enable a more automated, digital channel-based execution of FX spot orders, more stream-lined Fixed Income sales and by having a fully automated online FX position keeping and management processes available a more efficient Trading Desk operation.
• Assessing the current Treasury system architecture, interfaces and gather the IT departments requirements on terms of infrastructure and operation: in order to provide automated, highly integrated Treasury operations (reporting, sales, trading, ALM processes) the current architecture had to be re-designed with the connecting interfaces and satellite systems as well. The re-designed had to be preceded by a thorough investigation of the current landscape and interfaces. The re-design plans we made accordingly to the IT departments infrastructure-related requirements.
• Making sure all the related departments’ requirements are gathered: Market Risk and Treasury Back Office operations couldn’t be missed from the process, because they are vital in terms of operating a fully functioning, legally sound Treasury, therefore our consultants were paying extra attention to their needs and requirements as well, making sure that the automated DWH-exports, margin call reports and automated SWIFT reconciliations were put on the list of requirements.

Advocate consultants prepared a shortlist with potential vendors and systems who would be invited to the RFP process. By shortlisting the number of vendors, the selection timeline was shortened effectively, which enabled to deliver the results within the deadline the Board asked for. The detailed and prioritized Treasury business requirements were used as a basis for the RFP questionnaire and the related scoring methodology which would be used give weightings to specific business and technical requirements.

Carrying out and evaluating the RFP process

After issuing the detailed RFP and receiving the input back, the outcomes were scored on the basis of the developed scoring methodology, reflecting the capabilities of the shortlisted vendors and their products. From the shortlisted vendors Advocate consultants helped the client to pick only three vendors who were invited for a vendor and product demonstration, since many of the answers to the RFP questionnaire was ‘Yes’ the demonstrations were useful to gather information on the fine differences and detailed functions of the demonstrated systems.

During the demonstrations our client’s stakeholders were able to get the much needed detailed insights into the look and feel of the system, an insight that is vital to the future of the Treasury’s strategy. Our consultants helped the stakeholders and participants to evaluate the results as objectively as possible in order to choose the perfect vendor and system.

The whole RFP project was carried out in just two months with the desired results - a new Treasury Management System was chosen in order to replace the current, outdated one. With the help of an Advocate project manager, an implementation project timeline and budget was drafted to the client to show the foreseeable timeline and effort needed for the new Treasury strategy.

With the help of Advocate consultants our client initiated the next step of the procurement process which would eventually allow a mid-sized Hungarian Financial Institution to renew its Treasury operations, provide faster and reliable service and reach more customers with new Treasury products.