Cloud-Based Treasury Software: Why Legacy TMS Can’t Compete with Cloud-Native

Written by Kalei White
April 19, 2023

Is your cloud treasury software actually cloud-native? What does it even mean and why does it matter?

As a finance professional, it’s essential to stay informed and recognize the capabilities of cloud-native and AI technologies to keep up with the rapidly evolving world of treasury tech. As organizations increasingly adopt cloud technology, treasury management systems (TMS) must adapt to this shift to remain relevant and efficient.

However, not all solutions marketed as “cloud-based” are created equal.

In this blog post, we’ll recap the biggest takeaways from the Fintech Corner episode, “The Finance Buyer’s Guide to Treasury Cloud Software.

We’ll delve into the deceptive use of “cloud-based” by legacy TMS providers and emphasize the importance of understanding true cloud-native solutions. We’ll also discuss how you can evaluate cloud-based treasury software providers when you’re looking to upgrade your tech stack.

cloud based treasury software

Understanding the Misuse of “Cloud” in Treasury Tech

Many treasury tech providers misuse and abuse the term “cloud” to confuse potential customers. It is essential to understand what cloud-native software truly means and how it differs from legacy systems moved to the cloud.

As we’ll explain, knowing this difference can save you time, money, and frustration when evaluating a technology provider for your finance team.

Right now, software providers are competing to capitalize on the advantages of cloud-based technologies. Unfortunately, treasury management system (TMS) vendors that predate 2015 (when you could make software native to the cloud) are simply repackaging their old-school solutions as “cloud-based,” even though they don’t offer true native-cloud functionality.

This sneaky tactic often leaves unsuspecting finance professionals with sub-par tools that fail to deliver on their promised benefits, while charging exorbitant prices compared to what a cloud-native provider would charge.

Watch the episode of Fintech Corner, where Trovata CEO, Brett Turner, and CPO, Joseph Drambarean, rant all about how TMS vendors misuse “cloud”:

What is Cloud-Native Software and Why is It Important?

To avoid falling into this trap, it’s crucial for CFOs and other financial decision-makers to educate themselves about what constitutes genuine cloud-native software.

In essence, cloud-native software applications are designed from the ground up specifically for deployment in public or private clouds using a microservices architecture. They provide superior scalability, flexibility, and security features compared to traditional monolithic systems hastily ported to the cloud environment.

Evaluating Cloud-Based Treasury Software Providers

To ensure your team reaps the full benefits of a native-cloud solution, it’s essential to evaluate vendors thoroughly and identify those offering genuine public cloud infrastructure like AWS or Azure.

Let’s dive into some key factors to consider during this evaluation process:

Key Factors to Consider During Evaluation

  • Data Security: Your company’s financial data is its lifeblood. Make sure the provider offers enterprise-grade security features such as encryption at rest and in transit, multi-factor authentication (MFA), and regular vulnerability assessments.
  • Scalability: As your business grows, so should your treasury tech. Opt for solutions with auto-scaling capabilities that can handle increased workloads without compromising performance or requiring manual intervention.
  • Flexibility: Finance teams need agility when responding to market changes or evolving regulations. Seek out platforms that allow easy customization of workflows, reports, and integrations with other systems.
  • Innovation Capabilities: Technology evolves rapidly – make sure you’re partnering with a forward-thinking vendor committed to continuous improvement through cutting-edge development practices like serverless architecture and microservices-oriented design principles.
  • User Experience: A well-designed user interface can save time by streamlining tasks while minimizing errors due to confusion. Prioritize solutions known for their ease of use and intuitive navigation.

Identifying Genuine Public Cloud Infrastructure (AWS, Azure)

Beware of wolves in sheep’s clothing – some legacy TMS providers may claim to be “cloud-based” while merely hosting their monolithic systems on a private cloud.

Legacy TMS are able to masquerade as cloud providers since most professionals who don’t have a background in tech— understandably—wouldn’t know the difference.

“You would never know, as a buyer, if a provider may be taking the very same software that they have had for the last, 10, 20, even 30 years (could be whatever Java application they built back in the early thousands) and simply take that and install it on a set of servers that are just managed by Azure and then call themselves cloud, but nothing has changed.”

– Joseph Drambarean, Trovata CPO

According to Drambarean, to separate the wheat from the chaff, look for vendors that:

  • Deploy their software on popular public cloud services, like AWS or Azure.
  • Utilize platform-as-a-service (PaaS) offerings such as AWS Lambda or Azure Functions, which enable true serverless computing capabilities.
  • Proudly showcase customer success stories highlighting improved efficiency, cost savings, and innovation through adopting native-cloud solutions.

Benefits of Native Cloud Solutions for Finance Teams

Adopting native-cloud software offers significant advantages over traditional alternatives in terms of cost savings, scalability, flexibility, and innovation capabilities. By partnering with a technology-first company that delivers cutting-edge solutions through serverless architecture and microservices-oriented design principles, you can expect better overall value for your investment.

Cost Savings Passed Onto Finance Teams Due to Efficient Infrastructure Usage

The true power of cloud-native solutions lies in their ability to utilize resources more efficiently than legacy systems. This efficiency translates into lower operational costs, which are then passed onto finance teams as direct savings.

For example, Amazon Web Services (AWS) Lambda, a popular serverless computing service, allows applications to run without provisioning or managing servers – meaning you only pay for the computing time consumed by your application.

  • No upfront hardware investments required: No need to purchase expensive servers or storage devices.
  • Elasticity: Scale up or down based on demand without worrying about capacity planning.
  • Better resource utilization: Pay only for what you use rather than pre-allocating resources that may go unused.

Trovata CEO, Brett Turner, who witnessed the cloud revolution while he worked at Amazon, explains:

“In the past, you’d have to run your servers 100% of the time with backup because there was no other way. Today, you only use server capacity when you need it, thanks to virtualization. This is why we are able to offer a free version of Trovata while legacy TMS have much steeper entry level costs.”

– Brett Turner, Trovata CEO

Serverless Architecture as an Innovative Approach

Innovation is at the heart of cloud-native treasury tech like Trovata’s platform. By leveraging modern technologies such as serverless architecture and microservices-based designs, these platforms offer unparalleled performance improvements compared to monolithic systems while enabling rapid development cycles that foster continuous improvement:

  • Faster deployment times: Serverless architectures allow developers to push updates quickly since they don’t have any underlying infrastructure to manage. This means your finance team can benefit from new features and improvements at a faster pace.
  • Increased flexibility: With microservices-based designs, individual components of the application can be developed, tested, and deployed independently. This allows for greater agility in adapting to changing business requirements or incorporating new technologies as they emerge.
  • Better fault tolerance: In a serverless environment, if one component fails, it doesn’t bring down the entire system. Instead, other parts continue running unaffected while the failed component is automatically replaced by a healthy instance – ensuring minimal downtime and maximum availability for your finance team’s critical operations.

In short, adopting native-cloud solutions like Trovata empowers finance teams with better tools that are cost-effective, scalable and flexible – ultimately driving innovation across all aspects of treasury management.

The Bottom Line

Adopting cloud-native treasury tech is a game changer for CFOs, treasurers, controllers, and corporate finance professionals who need to do more with less.

Cloud-native technology paired with open banking APIs can give you greater control over cash flow management processes and enable your team to make informed decisions faster than ever.

With these advantages, it’s no wonder that more organizations like CrowdStrike and Krispy Kreme are turning towards native cloud solutions as their go-to choice for streamlining financial operations and improving efficiency across the board.

Want to see it for yourself? Request a demo today!

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