Treasury management - In-house banking

Question 1

What is the definition of In-House bank?

Answer 1

A dedicated entity or function which efficiently and cost

effectively provides banking services and funding to internal business entities.

Question 2

What are the elements of In-House bank?

Answer 2

*Consolidates and executes all internal and external treasury flows
*May be connected operationally to a Payment Factory
*Facilitates creation, communication and management of
standardized treasury processes, procedures and technology
*The IHB manages external banking services
*Facilitates the delivery of banking services to the
organization

Question 3

Why setup an In-house bank (IHB)?

Answer 3

 Improved funding and financial performance
 Simplify and standardize Cost savings Build scale and agility
 An IHB serves as the strategic vantage point for visibility and control to efficiently allocate funds and manage risk across your organization
 Simplifying external banking relationships helps to standardize processes which leads to reduced cost and enhanced risk management
 Centralizing and controlling dispersed transaction flows facilitates STP and operational scale
 Efficiency and cost savings from reduced transaction fees, borrowing costs, FX costs, banking overhead and headcount

Question 4

What are some checkpoints to setup the IHB?

Answer 4

 Checkpoint
Strategy
Rationale
Business case
Cost-Benefit analysis, ROI
Engage banking partners

Question 5

Before setting an IHB, what should i consider?

Answer 5

Define current state:
▪ People
▪ Process
▪ Technology
▪ Organization
▪ Location
Sourcing:
▪ Technology
▪ Banking Partner
▪ External Advisors
Go Live
****normally, you want to pick the hub that is friendlier in taxation of the overall money