Do You Have a Right to a Bank Account? Here’s How It Works for Individuals and Businesses
Opening a bank account is essential — whether you’re an individual managing day-to-day life or a business trying to operate and grow. But is it actually a legal right to get a bank account? And what happens if a bank says “no”? Let’s break it down — covering individuals and businesses and what the rules look like in the EU, UK, and US. For Individuals: A Basic Right in the EU (But with Limits) In the European Union, individuals have a legal right to open a basic payment account, thanks to the EU Payment Accounts Directive (2014/92/EU). What Is a Basic Payment Account? A no-frills bank account that lets you: There’s no credit or overdraft, and some limits may apply. Who Can Get One? You qualify if you: You can apply even if you: Why Can Banks Refuse You? Only for specific reasons: The bank must give a written explanation for the refusal, and you have the right to complain. What to Do If You’re Refused in the EU EU Country Examples 🇫🇷 France 🇩🇪 Germany 🇳🇱 Netherlands 🇮🇹 Italy 🇬🇧 UK Perspective (Individuals) In the UK, you don’t have a “right” to a bank account, but banks must offer a “basic bank account” if: Banks can still refuse you if you don’t meet ID requirements. 🇺🇸 US Perspective (Individuals) There is no federal law requiring banks to open accounts for individuals. Banks can refuse based on: Some states encourage access, but there is no guaranteed right to a bank account. For Businesses: No Guaranteed Right Anywhere Unlike individuals, businesses do not have a legal right to a bank account in the EU, UK, or US. Banks Can Refuse Without Explaining Why Banks are free to decline a business account based on: They are not required to justify the refusal in most cases — especially for corporate clients. What Can Businesses Do? Prepare a complete application: Choose the right bank: Try alternatives: EU Country Hints for Businesses 🇬🇧 UK & 🇺🇸 US: Also No Legal Right for Businesses In both the UK and US: Final Word If you’re struggling to get an account — either as a person or a business — there are routes, remedies, and alternatives. Just knowing your rights can be half the battle. 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. Notice: JavaScript is required for this content.
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Top Five KYC Data Points Your Bank Needs
This article is a contribution from one of our content partners, Avollone No matter the bank or its region, when they are collecting KYC information, there are always specific pieces of data that they will want to see. And if you are prepared with this knowledge, then your response and its processing can be that much faster and easier. Why are banks so keen on KYC requirements? Banks and financial institutions around the world are all subject to the many and variousstrict and comprehensive legal requirements –to collect KYC information to make sure that criminals do not misuse the financial system for money laundering and other financial crime related activities. Banks want to protect their reputation at all costs. History has shown that being involved in money laundering has a detrimental effect on a bank’s reputation. Most banks and bankers are decent people and do not want to be part of laundering money that comes from terrible crimes such as extortion, drug trafficking, illegal arms trading and human trafficking. So what are the 5 basic data points that banks collect as part of KYC? 1. IDENTIFICATION The bank needs to be sure they are conducting business with the right counterparty, just like you as a person identify yourself with a passport or a national identity card. The bank will ask the company for all the information needed to make that identification. This is often the easy part of the process, since it is mostly about documenting the company’s incorporation. The banks typically don’t pull the information themselves from the public register, since they want companies to deliver the latest, most up-to-date information and confirm its validity themselves. 2. BUSINESS MODEL AND PURPOSE OF THE RELATIONSHIP An essential part of KYC is understanding a customer’s business model. It helps banks to understand the risk of your business model and assess if the use of their products and services is valid. Banks are obligated to assess all customers’ risks and adjust their own risk setup according to the customer risk. This is to ensure banks are using the needed resources to identify potential money laundering and terrorist financing risks. Often companies do not use enough time to explain their business model to the banks. However, you are the most reliable source of a clear and correct description of your business model. With a little effort, you will avoid many ongoing questions from the bank regarding your use of the bank’s services and products. 3. OWNERSHIP AND CONTROL There is an increasing (regulatory) request for transparency when it comes to the ownership and control structure of companies. The goal is that Ultimate Beneficial Owners (the individuals who actually own or control the company, UBOs) should not hide behind complex company structures and shell companies. It can be difficult for companies to have complete oversight of owners and voting rights, since they also have to consider indirect ownership and control. But they should always have an updated ownership and control structure illustration. Banks will often ask for an illustration to visualize and better understand the structure. Once this is in place comes another cumbersome part of the process, which is collecting relevant information and documentation from the various Company Officers, being the UBOs from the ownership and control structure, along with the board and executive members of the company. If you’re located in the EU, you are required to proactively share information about changes in your Beneficial Owners. You are also legally responsible for the correctness of the information you share with the banks. Unfortunately, many companies do not have updated ownership and control information ready. This can be a delaying factor when it comes to the KYC process. 4. INTENDED USE Banks are required to understand the customer’s use of their products and services and need to make sure that it aligns with the company’s business model. In addition to that requirement, they must monitor their business to make sure that the customer is using the products as expected. This is to identify unusual use of the products, such as transactions that are not according to expected behavior. To perform this monitoring, banks need relevant information that can be used to monitor deviations from the expected behavior. If you do not deliver realistic information about your intended use of the bank’s products, you will experience that banks often come back and ask specific questions about transactions. They do that since they did not expect these transactions and need to understand the reason for them. When companies do not give realistic information about their expectations, that makes future cooperation more time-consuming for both parties. The better information you deliver regarding your business model and your expected use of the bank, the fewer follow-up questions you will receive. 5. TAX INFORMATION As a part of the KYC process, you are often asked to deliver tax information. The request is mainly related to FATCA (US tax regulation) and CRS (EU’s Common Reporting Standard) and ensures that banks can share relevant tax information across countries In summary Banks aren’t asking for KYC information to annoy you or waste your time, although it can often feel that way. But armed with this insight, you can be prepared and have all the right pieces of information systematically organized, so you can quickly provide complete and correct information to the bank. With this, you’ll avoid unneeded interactions and save time for everyone – most importantly, yourself. 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.
Target balancing optimized with a cash management system
This article is written by Nomentia Making every cent count Idle cash is costly, and target balancing offers a powerful solution to keep funds active and optimized. It’s no surprise that global companies are investing in cash management systems to enhance target balancing and to make global cash management smoother and more effective. By automating fund transfers to maintain optimal cash levels across accounts, target balancing minimizes unnecessary borrowing and maximizes liquidity where it’s needed most. But how exactly does target balancing work in corporate treasury? What essential functions should a cash management system have to support this strategy effectively? And what best practices can help your team make the most of target balancing? From real-time tracking to streamlined reconciliation, this article breaks down the core features of cash management systems that support target balancing and shows how they help reduce costs, boost efficiency, and ensure every dollar is working toward business growth. No more idle cash—let’s make every cent count. Meet Jouni Kirjola Jouni Kirjola is the Head of Solutions and Presales at Nomentia, bringing nearly 20 years of expertise to the role. Specializing in payments, cash forecasting, in-house banking, and reconciliation, his extensive experience and deep knowledge of financial solutions make him a key expert in delivering tailored solutions. Making global cash management effective Imagine a multinational technology firm with subsidiaries in North America, Europe, and Asia. The company has been experiencing inefficiencies in its cash management process. Each regional subsidiary maintains separate bank accounts to handle local operations, but cash flow requirements vary significantly across regions. For example, the European subsidiary often has excess cash due to slower product cycles, while the North American subsidiary faces frequent cash shortages due to high operational expenses. This discrepancy leads to idle cash sitting in European accounts while the North American subsidiary needs to borrow short-term funds to cover its daily expenses, incurring unnecessary interest costs. The company’s treasury department struggles to manage these imbalances manually, and reconciliation across multiple accounts becomes a time-consuming task. “In a complex, decentralized operation, target balancing becomes even more crucial. It gives treasury teams real-time control over cash positions across multiple jurisdictions.” – Jouni Kirjola, Head of Solutions & Presales To streamline cash management and reduce costs, the company decides to implement target balancing using a cash management system. The system allows the company to set target balances for each subsidiary’s account based on anticipated cash flows, operational needs, and historical patterns. For example, the European subsidiary’s target balance is set higher to account for slower cash cycles, while the North American subsidiary has a lower target balance to match its higher liquidity needs. By integrating the CMS with its bank accounts and ERP system, the company is able to automate fund transfers across its subsidiaries. Excess cash in the European accounts is automatically swept into a central treasury account, while the North American account is topped up when needed. How does target balancing work in corporate treasury? In corporate treasury, target balancing is a cash management strategy used to maintain specific balances in bank accounts based on anticipated cash flow needs. The objective of target balancing is to ensure that funds are available where and when they are needed while minimizing idle cash across accounts. By setting a “target” amount for each account, companies can strategically allocate resources within their banking structures to optimize liquidity, reduce interest costs, and simplify cash flow management. Target balancing mechanisms Target balancing involves establishing a predefined cash balance (target) for each account, which aligns with a company’s projected cash flow requirements. This target can be fixed or adjusted dynamically, depending on operational needs and market conditions. If an account exceeds its target, excess funds can be moved to a central account, while accounts that fall short of their targets can be topped up from a central pool. This balancing process typically occurs at the end of each business day and is often automated through treasury management systems. “A key advantage of target balancing is its ability to reduce the need for costly external borrowing. If funds are already in-house and properly allocated, borrowing costs can drop significantly.” – Jouni Kirjola, Head of Solutions & Presales Target balancing is especially useful for businesses with decentralized operations or those operating in multiple jurisdictions, where cash needs vary significantly across entities. It allows corporations to optimize liquidity without the need for constant manual transfers. Types of target balancing Comparing target balancing with other cash pooling techniques Compared to zero-balancing and notional pooling, target balancing offers distinct advantages and limitations. Optimal use cases for target balancing Target balancing is particularly effective for companies with complex multinational structures or operations that experience fluctuating cash needs. For example, our example multinational corporation with subsidiaries operating in different time zones and regulatory environments might use target balancing to ensure that each subsidiary has sufficient cash for local obligations without relying on central funds constantly. Additionally, businesses with seasonal cash flow patterns, such as retailers with peak seasons, can benefit from dynamic target balancing to meet shifting operational demands. Role of a cash management system in target balancing A cash management system, or a CMS, plays a pivotal role in supporting target balancing for corporate treasury functions by providing automated tools to manage intercompany and inter-account transfers, monitor real-time balances, and forecast cash needs. Target balancing requires a sophisticated CMS that can seamlessly integrate with enterprise resource planning (ERP) systems and banks to provide efficient, accurate, and real-time oversight of cash positions. “Target balancing is about precision. With the right technology, you can automate the process of moving funds across accounts, maintaining balance with minimal human intervention.” – Jouni Kirjola, Head of Solutions & Presales. Core functions of a cash management system for target balancing The primary functions of a CMS that supports target balancing include automated transfers, real-time balance tracking, and cash flow forecasting. These tools work together to ensure that accounts are maintained at optimal levels according to the target balance criteria. Automation in…
5 Do’s and Don’ts When Hedging for the First Time
This article is written by HedgeFlows For finance executives, managing foreign exchange (FX) risk is critical to protecting your business from the unpredictability of currency movements. Yet, hedging—especially for the first time—comes with challenges. Successful hedging requires a well-thought-out strategy tailored to your company’s specific needs, risk tolerance, and exposure to currency fluctuations. While some mistakes are common for first-timers, so are proven best practices that can set the foundation for effective FX risk management. Below, we’ll break down five things you should NOT do when hedging for the first time and five things you SHOULD do to maximise your chances of success. 5 Things Not to Do When Starting to Hedge 1. Basing Decisions on the Current Rate Level Instead of Your Risks It’s tempting to make hedging decisions based on favourable exchange rates. However, this approach often leads to reactive strategies that don’t address the underlying risk. For example, if your business has limited risk due to natural hedges in your operations (e.g., revenues and expenses in the same currency), over-hedging to “lock in a good rate” could be unnecessary and costly. Instead, focus on identifying your actual FX risks and hedging to mitigate those exposures, regardless of market conditions. 2. Justifying Hedging with a Market View Hedging is about reducing risk, not about predicting where the market is heading. If your decision to hedge is based solely on your expectations for currency movements, you’re speculating, not hedging. For instance, if you think the GBP/USD rate is going to depreciate and choose to hedge simply because of that belief, you could leave your business exposed should the rate move in the opposite direction. Keep your hedging strategy disciplined and avoid making speculative bets. 3. Not Comparing Hedging Costs to Potential FX Risks Hedging comes with costs, from transaction fees to opportunity costs. Many first-timers overlook these costs or fail to weigh them against the potential financial impact of FX risks on their business. For example, paying a high premium for an option that provides minimal protection may not be worth it. Always calculate and compare costs relative to the potential risks and decide if the hedge is worth implementing. Conversely, don’t let hedging costs sway away from considering hedging – it is all about comparing these costs to how much currencies could move. For example, hedging many G10 currencies for several months costs a fraction of a percent and can protect from currency swings that can potentially exceed several percent. 4. Hedging Too Much or Too Little Finding the right balance is crucial. Hedging too much can expose your business to unnecessary costs, while hedging too little leaves your business vulnerable to currency swings. A common mistake is attempting to hedge every single transaction. Instead, focus on your key exposures – such as large contracts or regular currency flows—and use those as a starting point for your hedging programme. 5. Forgetting About Your Hedges Hedging isn’t a set-it-and-forget-it approach. Forgetting to monitor and manage your hedges can lead to mismatched coverage or missed opportunities to optimise your strategy. For instance, if your cashflows change or if market conditions shift significantly, your existing hedges may no longer align with your financial goals. Keep an eye on your portfolio and adjust as needed. 5 Things to Do When Starting to Hedge 1. Set Clear and Quantifiable Hedging Objectives Start by identifying what you’re trying to achieve with your hedging programme. Are you looking to stabilise cash flows, preserve margins, or protect against large currency swings? Defining clear and measurable objectives ensures your hedging strategy stays aligned with your business goals. For example, a good objective might be to “hedge 70% of our projected USD revenues for the next 12 months to ensure no more than a 5% deviation from budget.” 2. Periodically Review Hedging Needs Markets are dynamic, and so is your business. Changes in operations, sales projections, or market conditions may require updates to your hedging programme. Establish a regular schedule – monthly or quarterly – to review your forecasted cashflows and FX exposures. This review process allows you to identify additional risk areas, fine-tune coverage, and ensure your strategy remains effective over time. 3. Compare Prices from Two or More Providers Don’t settle for the first quote you receive. Different hedging providers – banks, brokers, or fintech firms – offer varying rates and products. Comparing pricing and terms ensures you’re getting the best deal. For example, shop around to find competitive pricing on forward contracts or options while ensuring the provider offers robust support and execution capabilities. Remember that lower fees shouldn’t come at the expense of service quality. 4. Align Hedges with Projected Cashflows Effective hedging matches the size, timing, and currency of your hedges with your anticipated cashflows. When your exposures and hedges are synchronised, you can better protect your bottom line without creating unnecessary risks. For example, if you expect a €500,000 payment in six months, a six-month forward contract for the same amount would hedge that exposure effectively. Misaligned hedges, however, could result in over-coverage or liquidity challenges. 5. Gradually Ramp Up Hedging While Fine-Tuning the Process Avoid implementing your entire hedging programme in one go. Start small with limited coverage, evaluate the results, and refine your strategy before scaling up further. This phased approach allows you to identify what works, learn from mistakes, and ensure your process runs smoothly. For example, you might begin by hedging 20% of your monthly exposures and increase gradually as you grow confident in your strategy. Take the First Step Towards Effective Hedging Hedging for the first time requires a careful balance of strategy, discipline, and flexibility. By avoiding common mistakes and applying proven best practices, you can build an FX risk management programme that stabilises your cashflows and protects your business from currency volatility. Remember, hedging is not a one-size-fits-all solution. Each organisation has unique needs, and your strategy should reflect your business’s specific goals and risks. If you’re ready to explore how effective hedging can transform your financial operations,…
The Evolution of Treasury: How Has the Role Changed in Recent Years?
The treasury function is rapidly transforming. Treasury Masterminds recently surveyed treasury professionals to uncover how their roles have evolved over the past five years. With over 100 respondents, the results highlight significant shifts in treasury priorities: Connecting the Dots: Identifying Broader Trends These findings complement last week’s poll, which highlighted financial strategy and forecasting as critical skills, closely followed by cash management and risk management proficiency. Interestingly, technology was viewed as a crucial but supportive enabler rather than a primary skill. Taken together, the results from both polls clearly illustrate an ongoing shift in the treasury landscape: technology and automation are rapidly becoming indispensable, enabling treasurers to dedicate greater focus to strategic and analytical tasks. A significant trend emerges: as technology handles routine transactional activities, treasury professionals have more capacity to engage strategically within their organizations. This reinforces the strategic significance of treasury and underscores the importance for treasury professionals to maintain robust risk management skills, financial forecasting abilities, and strong leadership and communication skills. Tech Skills of Treasurers: Essential but Enabling Although technology was identified primarily as an enabling tool rather than the primary skill set, proficiency in technology remains essential. Treasurers today must be comfortable using treasury management systems (TMS), ERP integrations, data analytics tools, and increasingly sophisticated automation technologies such as artificial intelligence (AI) and machine learning (ML). These skills allow treasurers to leverage data effectively, ensure accuracy in forecasting, manage risks proactively, and support strategic decision-making. Therefore, while not the highest-ranked individual skill, technology competency is integral to the modern treasurer’s effectiveness and efficiency. Overall, both polls underscore that treasury professionals today require a balanced, multifaceted skill set. Treasurers are becoming increasingly integral strategic advisors within their organizations, supported by powerful technological tools that enhance operational efficiency. Does this resonate with your own experience in treasury? We invite you to join the discussion and share your perspective! 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. Notice: JavaScript is required for this content.
Cash Forecasting: Your Blueprint for Liquidity Performance
This article is a contribution from our content partner, Kyriba In today’s fast-paced financial environment, accurate cash forecasting serves as a blueprint for organizations aiming to maximize liquidity performance, reduce risk, and make strategic decisions with confidence. As financial teams navigate increasingly complex markets, political instabilities, and protectionist policies, predicting cash flows with precision is crucial for maintaining financial security, optimizing working capital, and supporting long-term business growth. In the context of global economic challenges such as tariffs, trade wars, and supply chain disruptions, robust cash forecasting empowers financial leaders to manage elevated costs, alleviate squeezed profit margins, and mitigate cash flow inconsistencies. This comprehensive guide offers an in-depth exploration of cash forecasting, emphasizing its critical role in treasury management and highlighting advanced strategies and technologies to achieve forecasting excellence and optimal liquidity performance. We will explore the challenges organizations face in achieving cash forecast accuracy and outline strategies to enhance these critical financial processes. By leveraging these insights, finance leaders can ensure their organizations remain agile and resilient in an ever-evolving economic landscape. Understanding Cash Forecasting Amidst the challenges posed by supply chain disruptions, regulatory shifts, and tariff uncertainties, cash forecasting equips organizations with the ability to anticipate and plan for financial needs. It is a critical process for maintaining financial stability, supporting strategic planning, and ensuring that an organization can meet its financial obligations. Cash forecasting has evolved from manual spreadsheets to sophisticated AI-driven models to address the dynamic needs of modern businesses. This evolution reflects the increasing complexity and speed of business operations, requiring more advanced and accurate forecasting tools. Understanding the fundamental components of cash forecasting is essential for effective financial management. These key concepts include various forecasting methods, the strategic application of time horizons, and the integration of critical data inputs. Together, they form the foundation of a robust forecasting strategy, enabling organizations to anticipate financial needs, adapt to market changes, and make informed decisions that drive long-term success. Forecasting Methods Time Horizons Data Inputs By integrating these forecasting methods, time horizons, and data inputs, organizations can achieve a comprehensive view of their financial future, enabling them to make informed strategic decisions and maintain robust cash management practices. Benefits of Accurate Cash Forecasting Recent financial market fluctuations demonstrate the critical role of accurate cash forecasting in maintaining liquidity and strategic agility. Companies with precise cash forecasting can adjust their investment and financing strategies quickly, avoiding liquidity shortfalls and capitalizing on favorable market conditions. This agility allows financial leaders to maintain operational stability and pursue strategic opportunities even amidst economic uncertainty. The benefits of accurate cash forecasting enhance an organization’s ability to manage cash and liquidity effectively, while also supporting strategic financial planning and risk management. By leveraging these capabilities, businesses can achieve greater financial stability and strategic agility. Enhanced Cash Visibility and Liquidity Management Cenveo Unwraps $490K inValue with 93% Cash Forecast Accuracy By adopting Kyriba’s Liquidity Performance Platform, Cenveo achieved a remarkable 93% improvement in cash forecast accuracy and a 90% increase in productivity, unlocking $490K in value in less than three months. This transformation enabled on-demand liquidity visibility and streamlined cash management processes, saving significant operational hours monthly. This comprehensive transformation not only improved operational efficiency but also paved the way for evaluating new financial opportunities, such as a potential $17.7 million cash flow benefit from supply chain financing and an estimated $1 million from business interruption claims. Improved Financial Planning and Risk Mitigation Varsity Brands Wins with100% Cash Visibility and 90% Cash Forecast Accuracy By integrating Kyriba’s advanced cash forecasting tools, Varsity Brands achieved forecasting accuracy exceeding 90% and gained 100% cash visibility. The transition to Kyriba enabled Varsity Brands to efficiently reconcile bank transactions, optimize cash positioning, and enhance overall financial strategy. This improvement not only streamlined their financial operations but also empowered the finance team to make data-driven decisions with confidence. By achieving such high levels of accuracy and visibility, Varsity Brands is poised sustained growth and operational efficiency, demonstrating the critical role of precise cash management in driving business success. Qualitative Benefits: Strategic and Operational Advantages Bray International Opens the Valve to97% Productivity and 100% Cash Visibility By adopting Kyriba, Bray International achieved remarkable results, including 100% cash visibility and a 97% improvement in productivity. This transformation not only provided comprehensive insights into cash positions but also significantly reduced the time and effort required for financial management tasks. Bray International standardized forecasting processes and improved the accuracy of cash management, leading to substantial operational efficiencies. This strategic shift allowed the company to optimize liquidity performance and support better decision-making across its global operations. By leveraging advanced treasury management technology, Bray International has positioned itself for continued growth and operational excellence, demonstrating the critical role of comprehensive cash visibility and efficient treasury operations in driving business success. Quantitative Benefits: Financial Optimization and Growth Potential The Challenges of Cash Forecasting In the current economic landscape, cash forecasting has become increasingly challenging. The complexities of global events—geopolitical tensions, trade wars, and economic shocks—highlight the need for resilient cash forecasting processes. Addressing cash forecasting challenges requires a combination of advanced technology, strategic planning, and effective resource management to create a resilient cash forecasting process that can adapt to both internal and external pressures. Internal Challenges Data Accuracy: Ensuring the accuracy of financial data is crucial for reliable cash forecasting. Errors in data can lead to incorrect forecasts, which may result in poor financial decisions and unexpected cash shortages or surpluses. Integration Issues: Organizations often face difficulties in integrating data from multiple sources, such as ERP systems, bank statements, and other financial tools. Disparate systems and data silos can complicate the consolidation process, making it challenging to achieve a comprehensive view of cash positions. Resource Constraints: Limited resources, including time, personnel, and technology, can hinder the effectiveness of cash forecasting. Many organizations struggle to allocate sufficient resources to develop and maintain robust forecasting processes, often relying on manual methods that are time-consuming and error-prone. External Challenges Market Volatility: Fluctuations in market conditions can significantly impact cash flow predictions. Factors such as currency exchange rates, interest rates, and commodity prices can change rapidly, introducing uncertainty…