In the past decade, many multinational corporations have turned to in-house banking solutions for global cash management, and it’s easy to see why. Treasury departments understand that their subsidiaries need funding, and they are looking for a more cost effective way of doing that than having each unit borrow from a bank locally. In-house banking provides a way around that, as well as a good solution for cash visibility and managing FX.
AFP’s latest Treasury in Practice guide, underwritten by Thomson Reuters, is intended to be a back office look at in-house banking, providing a glimpse into what multinational corporate treasury teams do on a daily basis to manage their cash and FX needs around the globe. In-house banking clearly offers a variety of benefits for multinational corporate treasury departments, however, implementation is an expensive and lengthy process that will require buy-in from senior management. Furthermore, with regulations looming that could force companies to eschew cash pooling and by extension in-house banking, building a business case for implementation may prove even more difficult for many treasury departments.
So if your treasury department is considering adopting an in-house bank, it’s a good idea to download the new guide. Perhaps after hearing from some of your peers on their in-house banking procedures, you’ll have a better idea of whether this solution is right for your treasury team.