Tolve noted that a company which does its bank deposits via the SunGard platform can look at all of its counterparties and see which is paying the best rate. "Right now, a large corporate might have 20 or 30 different banks," he said. "Just to do the price discovery, they're going to 20 or 30 different sites and receiving price information via email or phone."

Lee Epstein, CEO at Decision Analytics, a San Francisco company that advises treasurers on short-term investments, suggested financial institutions provided some of the impetus for treasuries to trade online in response to the low-interest-rate environment.

"There's not the margins there used to be, where someone can add value, when you are shopping for seven, eight basis points," he said. "I think that the Street had made an effort over the last 10 or so years, and I think the buy side has said, 'Sure, why not, it makes it a lot easier.'"

Jeff Diorio, a principal at consulting company Treasury Strategies, agreed that online execution is growing. He cited the ability to reduce human error as one of the selling points.

"If the investment amount can be set up automatically, obviously you're not going to fat-finger it," Diorio said. "There's also the ability to have limits. Some of these [platforms] have limits that you can configure so that you can't accidently put too much into one investment type or with one counterparty."

Trading online also automates the confirmation and settlement processes, he said. "It's much more controlled, because you're working with all kinds of standard setups. It's much more efficient, and there's much less potential for error."

Websites that allow companies to invest in money market funds include SunGard, ICD, Treasury Curve, and proprietary portals operated by banks and fund companies. Companies can trade commercial paper and other short-term investments on Bloomberg, Tradeweb, and SunGard.

"One of the benefits to dealing directly with your funds manager or the bank is, even though you're restricted to what they're offering, you're probably paying less in fees," Diorio said, adding that the third-party platforms offer a wider range of investments but charge banks a small fee, which is likely passed on to the treasury customer.

Epstein said that while third-party platforms may offer more choices, "the real question is: How many money market funds does one need? How many investments does one need to deal with?"

Integration Shortfall

While automation and straight-through processing are touted as advantages of trading online, the SunGard survey shows that a considerable portion of companies have not integrated their treasury management systems with the online portal on which they trade short-term investments. According to SunGard, 14.5% of respondents use a bank portal that's integrated with their treasury system, while 13% use a bank portal that's not integrated with their treasury system. Similarly, 13% trade on a third-party platform that's integrated with their treasury system and 13.8% trade on a third-party platform that's not integrated.

Constraints on companies' resources may be limiting their ability to integrate systems, said Jon Williams, head of U.S. institutional market operations at Tradeweb. Williams noted in particular the efforts companies are making to comply with new regulations. "It seems like they will have to continue to devote a very large [portion], if not the vast majority, of their development resources, toward regulatory compliance," he said.

Short-term treasury investing has long centered on two products: money market funds and bank deposits. The changes the Securities and Exchange Commission is making in money fund regulations threaten to make them less attractive to treasurers, particularly the requirement that institutional prime funds switch from a constant net asset value of $1 a share to a variable net asset value.

Perhaps not coincidentally, treasurers seem to be broadening their horizons a bit.

"When we asked treasurers about their investment management objectives in prior years, immediate access to liquidity was always the primary object," said Tolve, pictured at left. "That's changing a little bit; they're more comfortable with duration risk."

He also noted that 27% of those surveyed by SunGard this year said they invest in commercial paper, up from 18% last year. "That was a rather large move and that tells me, one, due to the adoption of technology, corporates are doing a better job with their cash flow forecasting," Tolve said. "Two, they're willing to take a little duration risk if they have tools to evaluate the risk.

"That could be tied to not only where we are from a risk and yield perspective, but getting ready for some of these regulatory changes," he added.

Williams stated that corporate treasuries' historical reliance on money market funds as short-term investments has been challenged not only by regulatory changes, but also by the very low interest-rate environment.

Amid low rates, treasurers are searching for products that will give them the same qualities of liquidity and high credit quality they have gotten from money funds, as well as "the most efficient way to execute them," Williams said. "One of the things electronic trading offers is the most efficient way. When every fraction of a basis point counts, the ability to really look across a marketplace and analyze the available liquidity, and then execute at the best level, is of paramount importance. And those are basically the precepts of the whole notion of electronic trading."