In-House Banks and Cash Pooling: Why They’re the Hot Treasury Topic of 2025
From Treasury Masterminds If there’s one thing 2025 has made crystal clear, it’s that treasurers are done letting cash collect dust across dozens of accounts and entities. The conversation has shifted fast; from fragmented liquidity management to full-scale internal banking. In-house banks (IHBs) and cash pooling structures are no longer just “nice-to-have efficiency tools.” They’re becoming the backbone of how modern treasury teams centralize control, cut costs, and unlock liquidity. For years, the idea of a global cash pool or internal funding hub was a sort of corporate myth, talked about in every strategy deck but rarely executed at scale. That’s changing. The pressure of higher rates, FX volatility, and stricter bank regulations has forced treasurers to rethink liquidity management from the ground up. Every trapped dollar now carries a cost, every local bank relationship a layer of friction. So why are in-house banks the hot topic this year? Because technology, regulation, and business necessity have finally aligned. And there’s more than one way to build one. The Spectrum of In-House Banking Models No two in-house banks look the same. They evolve, step by step, as a company matures in its centralization journey. Here’s how that typically plays out: 1. Netting Centers – The First Step to Efficiency Many treasurers start with a netting center, essentially a clearing hub for intercompany invoices. Instead of subsidiaries paying each other across borders (and triggering FX costs and transaction fees every time), netting allows all positions to be offset periodically, say monthly, so only the net amount is paid or received.It’s simple, saves on fees, and reduces exposure to currency fluctuations. But it’s also the warm-up act—the first taste of centralization without major legal or accounting changes. 2. Cash Pooling – Centralizing Liquidity Next comes cash pooling. Whether physical or notional, it’s where treasurers start to actually bring balances together. In 2025, hybrid models are gaining traction, especially with multi-bank connectivity solutions that allow treasurers to manage pools across regions and banks in near real-time. The incentive is clear: maximize liquidity utilization, minimize idle cash, and make intercompany funding more efficient. 3. Intercompany Funding & Treasury Centers – Acting Like a Bank Once pooling is in place, many treasuries evolve into internal lenders. An in-house bank starts to function as a genuine intermediary: managing intercompany loans, FX transactions, and interest settlements.Subsidiaries borrow from or deposit with the IHB, rather than external banks. It reduces group-level borrowing, cuts down on transaction costs, and creates full transparency into cash positions.At this stage, treasury isn’t just managing cash, it’s actively steering group funding strategy. 4. Full POBO/ROBO – The Treasury Power Play At the top of the maturity curve sits the full in-house bank, complete with Payments-on-Behalf-Of (POBO) and Receivables-on-Behalf-Of (ROBO) structures. These models require robust TMS connectivity, legal clarity, and banking integration but the payoff is massive. You get true end-to-end visibility, centralized control, and a reduced external banking footprint. It’s not just operational efficiency; it’s strategic transformation. Why 2025 Is the Perfect Storm A few years ago, many corporates were hesitant to pursue full IHBs because of the technical, legal, and compliance hurdles. In 2025, that’s no longer a valid excuse. APIs, ISO20022, and cloud-based treasury platforms like Cobase have made global integration not only possible but surprisingly manageable. Combine that with a macro environment that rewards every basis point of liquidity optimization, and suddenly, in-house banking isn’t futuristic; it’s pragmatic. Treasury teams are realizing that the true value of IHBs and cash pooling lies in control: Want to learn how to actually build it? Join us next Monday, November 24 at 13:00 CET, for our Treasury Masterminds webinar with Cobase: “In-House Banking & Cash Pooling: Centralizing Liquidity for a Smarter Treasury.” Hear from treasurers and system experts who’ve designed, implemented, and optimized in-house banks and cash pools at scale. Expect practical examples, technology insights, and plenty of “lessons learned” from the real world. 🎙️ Host: Treasury Masterminds💬 Sponsor: Cobase🕒 Duration: 45 minutes + live Q&A Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information.
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From ledgers to the cloud: the evolution of treasury management systems
This article is written by Embat For many years, corporate treasurers relied on a mix of manual processes and fragmented systems to manage cash, liquidity and financial risk. Over the last two decades, the landscape of Treasury Management Systems (TMS) has evolved significantly, moving from simple spreadsheet-based workflows to sophisticated real-time API integrations. In this article, we explore the history of TMS and how technology has transformed treasury operations. The early days: manual bank uploads and reconciliation In the past, treasury professionals had to download bank statements manually from different banking portals and then upload them into their ERP or treasury software. The “system” consisted of manual bank uploads, often using CSV files, with limited digital processes. This was time-consuming, prone to errors and offered little real-time visibility. Some key challenges included: To address these inefficiencies, companies began using basic treasury management software that could ingest bank statement files in formats such as MT940 (SWIFT), BAI2 or CSV to automate reconciliation. The rise of host-to-host (H2H) and SWIFT connectivity As companies expanded and treasury functions became more sophisticated, the need for more automated data exchange led to the adoption of host-to-host (H2H) connections and SWIFT connectivity. Initially, large corporations established direct file-based connections with their banks to receive bank statements and send bulk payment files securely in a system known as host-to-host. This removed the need for manual downloads but remained batch-based and required significant IT involvement. Meanwhile, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) introduced a standardised messaging framework, enabling treasurers to receive consolidated bank statements from multiple banks through a single channel. While H2H and SWIFT were major advancements, they still had limitations in terms of real-time data access and flexibility. The API revolution: real-time treasury connectivity The latest wave of treasury innovation is being driven by APIs (application programming interfaces), enabling real-time, on-demand connectivity between banks, ERPs and Treasury Management Systems. With APIs, finance teams can retrieve bank balances and transactions in real time. With APIs, finance teams can: Regulatory changes, such as the revised Payment Services Directive (PSD2) in Europe, have played a crucial role in accelerating the adoption of open banking APIs. By mandating banks to provide secure API access to account data, PSD2 has improved transparency, enabled faster transactions and ultimately delivered more efficient treasury operations. The future of treasury management As APIs become the new standard, the future of treasury lies in fully integrated ecosystems, where Treasury Management Systems, ERPs and banking partners communicate seamlessly. Emerging trends include AI, blockchain and embedded finance. Emerging trends include: Conclusion From manual bank uploads to API-driven real-time connectivity, the evolution of Treasury Management Systems reflects the growing demand for efficiency, accuracy and strategic insight in corporate treasury. As technology continues to advance, treasurers will have even greater control over liquidity, risk management and financial decision-making. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below. Notice: JavaScript is required for this content.