Prefunding — The Silent Cost of Speed
Written by Sharyn Tan (Views are my own) Faster payments sound like pure upside: instant settlement, happier suppliers, smoother cash-flow forecasting. But every corporate treasurer knows the hidden catch—the faster you need to pay, the more cash you have to park upfront. This is the paradox of prefunding, and it’s one of the biggest silent drags on working capital today. Let’s unpack why prefunding exists, why skeptics rightly push back on “magic” fixes, and how stablecoins and tokenized deposits could deliver measurable relief—without asking treasurers to take blind leaps of faith. Why Prefunding Hurts (and Why It Won’t Disappear Overnight) When you send a cross-border payment today, someone—usually your bank or a correspondent—has to hold local currency in the destination market before the payment can be credited. That’s prefunding. Multiply that across 20+ currencies, multiple payment rails (SWIFT, SEPA, FPS, SPEI, etc.), and different cut-off times, and you quickly end up with hundreds of millions (or billions) immobilised. The Pain Is Real—and Quantifiable Prefunding exists because payment systems weren’t built for a 24/7 world. Local rails have cut-offs, weekends, and holidays. To guarantee a supplier in Mexico gets paid on Friday afternoon CET, someone has to get MXN to the local account days in advance. Recent benchmarks: In a 5% interest-rate environment, every €100m sitting idle costs €5m a year in lost yield. That’s real money. Why Many Treasurers Remain (Rightly) Cautious I’ve sat in enough risk-committee meetings to know the objections by heart. They aren’t “blockchain FUD”—they are legitimate governance concerns: These aren’t trivial hurdles. Any treasurer who waves them away hasn’t spent enough time with group risk or internal audit. Where Evidence Suggests Progress Is Possible That said, the landscape in 2025 looks different from what it was in 2018. A few developments are worth watching—not as 100% proven solutions, but as signals that the industry is trying to address the concerns above: None of these examples means your company should flip a switch tomorrow. They simply show that some risk-tolerant, well-resourced players have moved beyond pilots. A Pragmatic, Low-Regret Path Forward (If You Choose to Explore) If you’re curious but cautious, here’s a sequence that minimizes irreversible commitments: Treasurer’s Take (With Full Disclosure) I haven’t run a complete end-to-end stablecoin loop inside a large corporate treasury: from digitized short-term investments → cross-border payment → supplier receipt → cash concentration back into investments, and I’m not here to claim the technology is production-ready for every treasury. Prefunding isn’t evil—it’s been the duct tape holding global payments together. But duct tape gets expensive at scale. Stablecoins and tokenized deposits aren’t science experiments anymore; they’re regulated, auditable, and already cheaper than the status quo in many corridors. Whether they succeed at scale remains an open question. But the conversation is shifting slowly from “Will this ever work?” to “Under what conditions, and for whom?” The winners won’t be the companies that adopt stablecoins or tokenized deposits for the sake of it. They’ll be the ones that treat digital settlement assets as another cash-equivalent tool—right alongside Fedwire, CHIPS, and SEPA Instant—and govern them with the same rigor. 🤠Let’s Share Realistic Perspectives How are you managing prefunding today? I’d especially value hearing from anyone who has tried and then walked away—those stories are just as useful as the success ones. Drop a comment if you’re open to swapping notes anonymously. No sales pitches, no hype—just treasurers comparing scars and scorecards. Bojan Belejkovski, Treasury Masterminds Board Member, Comments I’m in the “watching closely, testing nothing yet” camp because most of it, at least today, is hype. The prefunding problem is real – I’ve seen enough treasury operations to know cash sitting in nostro accounts “just in case” adds up fast. The opportunity cost in a high interest environment isn’t theoretical. What would actually move me from observer to pilot mode? Two things. First, I’d want to see bank-issued tokenized deposits gain real traction, not just press releases, but actual operational proof from corporate peers. If banks launched a programmable deposit product that carried the same legal and regulatory treatment as my existing deposits, that’s a different conversation. The counterparty risk profile matters more. Second, I need to see the full operational picture beyond just the payment rail. How does month-end close actually work? What did the first audit cycle look like? Did treasury headcount go up or down after implementation? Those are the details that matter when you’re pitching this to a CFO or risk committee. Right now, the smarter play seems to be optimizing what already exists – virtual account structures, instant payment rails, better cash concentration protocols. It’s not revolutionary, but it’s also not introducing new dependencies or regulatory uncertainty. The question I keep coming back to: are stablecoins solving a payments problem, or are they solving a liquidity management problem? Because those require very different governance frameworks. I’m open to being convinced, but I’d rather be 12 months late with the right controls than 12 months early with a compliance headache. 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.
Franklin
From risk to resilience: why bank connectivity is now a CFO mandate
This article is a contribution from our content partner, Kyriba In a landscape where financial operations are as vulnerable to digital disruption as they are to economic shocks, secure bank connectivity is becoming a new pillar of corporate resilience. As CFOs shoulder broader responsibilities in safeguarding both assets and reputation, the risk of outdated connectivity now rivals traditional market risks. Security and privacy are no longer back-office concerns—they are central to boardroom strategy. In fact, 76% of CFOs now rank them ahead of inflation and market volatility, signaling a major pivot in finance leadership priorities. State of the market: Risk radar for CFOs The financial landscape is changing rapidly, and so are the threats. According to recent industry data, nearly 90% of U.S. companies faced payment fraud attempts in 2025, with AI-powered scams like deepfakes fueling a staggering 118% year-over-year increase. Manual verification methods and disconnected bank processes are no longer sufficient barriers against these sophisticated attacks. Meanwhile, regulatory scrutiny is intensifying. New mandates around transparency, sanctions, and real-time reporting are raising the stakes for compliance. Organizations relying on outdated, fragmented connectivity risk not only operational disruption, but also reputational damage and costly penalties. But it’s not just about risk. The ability to move money confidently, forecast liquidity accurately, and respond quickly to market events is now a defining factor in corporate resilience. Forward-looking CFOs are seizing this moment to transform their foundations, turning secure bank connectivity into a driver of agility and growth. While CFOs are increasingly aware of these external threats, many are overlooking a critical vulnerability much closer to home: their own bank connectivity infrastructure. Even as CFOs fortify defenses against external fraud and regulatory scrutiny, a more insidious risk often goes unnoticed within their own operations. Many organizations still rely on: While most discussions around cybersecurity focus on external threats such as cyberattacks or data breaches, CFOs often overlook another critical risk vector within their own operations: outdated and fragmented bank connectivity processes. Maintaining legacy bank connections is no longer just an IT headache—it’s an existential risk for the modern CFO. What once seemed like a technical detail now shapes the organization’s exposure to fraud, compliance penalties, and operational disruption. Here’s why: Manual, fragmented processes are ripe for exploitation by today’s sophisticated threat actors. Internal gaps and disconnected systems make it easier for fraudulent transactions to go unnoticed, introduce compliance failures, and create operational delays, especially during periods of market or geopolitical stress. CFOs can no longer afford to treat fraud as an isolated event. Robust, real-time validation and compliance tools are now essential weapons in the treasury arsenal. The good news? Forward-thinking CFOs are recognizing that modernizing bank connectivity isn’t just about risk mitigation—it’s about transformation. The strategic advantage of modern bank connectivity Upgrading connectivity is not just about plugging security holes. Modern, unified connectivity delivers: In a world of volatile FX, rising rates, and political risk, these advantages are not just operational, they’re strategic. This is where a strategic approach to connectivity becomes essential. Rather than continuing to patch legacy systems, leading organizations are embracing a fundamentally different model. How BCaaS reduces complexity and builds confidence Bank-Connectivity-as-a-Service (BCaaS) is designed to address these risks and inefficiencies head-on. BCaaS isn’t just a technical upgrade; it’s a strategic move that allows CFOs to future-proof their organizations against rapidly evolving threats. The question isn’t whether to modernize bank connectivity, but how quickly you can make the transition. Here’s what industry leaders are prioritizing: What leading CFOs are doing now CFOs leveraging centralized, managed bank connectivity and automated payment validation are better positioned to: To build resilience and stay ahead of fast-evolving risks, CFOs should: Where is bank connectivity headed? Looking ahead to the next 12–24 months, the role of bank connectivity will only intensify: In the coming year, CFOs who proactively modernize their bank connectivity will set a new standard for agility and resilience, transforming financial operations from a point of vulnerability into a source of strategic strength. Why secure bank connectivity is a strategic imperative Today’s CFOs are balancing increasing financial complexity with digital risk mitigation. With secure connectivity and automated fraud validation, CFOs can unlock new opportunities for growth, stability, and agility in an unpredictable landscape. In the end, risk is inevitable, but resilience is a choice. By transforming fragmented bank connections into a unified, secure foundation, CFOs can turn their greatest vulnerabilities into their most powerful assets. The organizations that invest in future-proof connectivity today will be the ones that lead with confidence, and emerge stronger, no matter what tomorrow brings. Investing in secure connectivity and future-proof fraud prevention isn’t just about protecting assets. It’s about enabling growth, agility, and peace of mind in an unpredictable world. Read more from Kyriba 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.
The Rise of Alternative Payment Rails: What Treasurers Should Know About Thunes–MoMo and TerraPay Xend
From Treasury Masterminds Corporate treasurers love stability, but the payments infrastructure clearly didn’t get the memo. Over the past year, a different type of cross-border network has been creeping into the spotlight — one built not on correspondent banks, but on mobile wallets, interoperability layers and real-time settlement rails. Two developments stand out right now: You don’t have to like the hype, but you should understand what it means. Thunes + MoMo: Real-Time Cross-Border Payments Into Nigeria Nigeria is one of the biggest remittance corridors in the world, and also one of the toughest for corporates managing payouts, refunds or supplier payments. Traditional correspondent-banking paths into the country often run on limited windows, slow clearing, and unpredictable end-to-end fees. Thunes and MoMo PSB are trying to break that pattern by connecting global send corridors directly into millions of mobile-wallet users in Nigeria with real-time settlement. Why this matters for corporate treasury This isn’t just a consumer remittance upgrade. It’s a signal: Africa’s payment corridors are modernising from the outside in. TerraPay’s Xend Network: The Interoperability Push TerraPay’s new Xend network positions itself as a global payments-interoperability layer, linking banks, mobile-money schemes, wallets and fintech platforms. The pitch is simple: one connection, many endpoints. If this sounds like the modernised, API-first cousin of traditional clearing networks… it basically is. What Xend wants to solve Xend aims to function as the connective tissue, the “universal adaptor” treasurers secretly wish existed. Why it matters for corporates If Xend scales, it could become part of the treasury conversation whenever companies evaluate multi-rail payment strategies. The Bigger Picture: A Parallel System Is Forming Treasurers are now quietly dealing with two payment worlds: The second category used to be an afterthought. Not anymore. What Treasurers Should Do Now 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.
Why SMB Finance Teams Don’t Need a Full Enterprise Treasury Management System
This article is a contribution from our partner, TreasuryView TL, DR Enterprise Treasury Management Systems (TMS) are designed for multinationals managing global cash pools, hundreds of bank accounts, and complex derivatives. For SMBs with €10M–€500M in loans, these systems are overbuilt, costly, and slow to implement. What SMB finance teams need is visibility, automation, and audit-ready reporting. Modern cloud solutions like TreasuryView provide the control and insights SMBs need in days, without the enterprise baggage. The Visibility Myth: Bigger, Entreprise Systems Aren’t Always Better When SMB finance teams begin struggling with Excel: manual reconciliations, version errors, and late-night reporting, many assume the next step is an enterprise TMS. These platforms promise total visibility across debt, liquidity, and risk. But visibility isn’t about the number of features; it’s about having the right features for your team size and complexity. For SMBs, enterprise solutions often add unnecessary cost and operational burden while still leaving day-to-day needs unmet. Why Enterprise TMS Doesn’t Fit SMB Needs 1. Costly Systems to Buy and Maintain for SMBs Enterprise TMS solutions are built and priced for global corporations. Licensing alone can run into hundreds of thousands of euros annually, with additional spend required for consultants, custom integrations, and ongoing IT support. All the investment and binding contracts also make it hard to leave the For SMBs managing €10M–€500M in loans, this level of overhead diverts capital away from growth and liquidity management. 2. Painfully Slow Implementation while SMB finance teams need solution fast Enterprise TMS deployments are notorious for being complex IT projects. A full rollout can take 6–12 months, requiring ERP integrations, vendor workshops, and training. During this time, reporting inefficiencies remain unsolved, often worsen. SMBs, however, need visibility today, not next year. With TreasuryView, onboarding takes less than a day with sign up less than <1 min, with no IT involvement. 3. Over-Engineered Treasury Features that SMBs Never Need/Use Enterprise systems shine in costly areas like cash management, payment management, and Liquidity Management – tools that few SMBs ever need. Most SMBs simply need a clear debt dashboard, automated maturity reporting, and accurate interest cost forecasting. Paying for advanced modules you’ll never use wastes both budget and team capacity, needless to tell the onboarding time that it saves and how more simple and intuitive software is to use. 4. Operational Burden Running an enterprise TMS requires specialized staff, hourse of training… For a lean SMB team, where the CFO and controller often wear multiple hats, this creates an impossible workload. In practice, many SMBs end up reverting back to Excel while their costly TMS sits underused. TreasuryView eliminates this friction with an intuitive, spreadsheet-like interface that requires no treasury expertise or IT background. Human support is always available for a quick call – no IT ticket and talking with AI. The SMB Finance Team’s Reality: Lean Teams, Complex Portfolios SMB finance teams face serious treasury challenges, especially since managing debt and treasury in spreadsheet, is risky: The real constraint isn’t sophistication — it’s time and bandwidth. Excel creates risk; enterprise TMS adds complexity. SMBs need the middle path: fit-for-purpose visibility without enterprise overhead. What SMBs Actually Need in a TMS Alternative The right treasury platform for SMBs should focus on essentials: These capabilities cover 95% of SMB treasury needs without the cost, delay, or operational burden of an enterprise TMS. When (Rarely) an Enterprise TMS Makes Sense An enterprise TMS may be justified if your company is: Conclusion: SMB Finance team, Don’t Overbuy Complexity! Enterprise TMS platforms are designed for multinationals with large treasury teams. SMBs need visibility, automation, and compliance without complexity. 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.
The Role of Currency Management in the Ecosystem Economy
This article is written by Kantox As financial services are more and more embedded into platforms that provide a one-stop shop experience for clients, there are still gaps where currency management can bring great value. Discover the role of currency management in the realm of fintechs and how it can shape the ecosystem economy. The breakneck performance of leading technology stocks this year is widely attributed to macroeconomic factors such as receding inflation expectations and a pause in short-term interest rate increases in the United States. But here’s another possible explanation: investors are rallying —no pun intended— around the new Ecosystem Economy. This emerging ‘Ecosystem Economy’ is analysed in a book by Venkat Atluri & Miklós Dietz. The Ecosystem Economy. How to Lead in the New Age of Sectors without Borders. According to the authors, the barriers between traditional sectors of the economy are coming down. Instead, large platform companies are reorganising traditional sectors by focusing, like never before, on technology-empowered customers. These (impatient) consumers are now firmly in command. Wherever they go, they seek one-stop shopping experiences to satisfy their changing and ever-expanding needs. All in all, Atluri and Dietz estimate $80 trillion in revenue flowing to small, medium and large ecosystem players in the coming decade or so. This exciting scenario is filled with opportunities for fintech companies as they find their place in the new economic landscape. The emergence of global ecosystems Global ecosystems, according to the authors, will be centred around two types of needs. On the one hand, individual human needs will be addressed in areas like Travel, Home, Commerce, Talent, Mobility and Wealth. On the other hand, B2B services like SMEs and Enterprise services will also be targeted. The companies involved will act either as large ‘ecosystem orchestrators’ or as smaller partners/competitors. Take the so-called Home ecosystem. This area is already operating through platforms that include real estate and rental search engines and online services for inspection, appraisal, moving, renovation, legal issues, decoration and maintenance. Needless to say, this one-stop shopping experience is incomplete without financial services like financing and insurance. As financial services become embedded into most ecosystem platforms, a broad process of ‘fintechisation’ is gaining ground. It will only gather momentum. Astute participants will identify ‘ecosystem gaps’ and move to fill them. Here’s one such gap: currency management. Let’s analyse the role of currency management in this ecosystem economy that is taking shape. The role of currency management Consider the following ‘ecosystems’, and how automated currency management can help fintechs play a decisive role: Enterprise sector: Services to large companies encompass M&A, treasury management, treasury technology infrastructure, long-term funding, strategy consulting and risk management. ⇒ Potential FX-related improvement: in-house FX services to optimise currency management between headquarters/subsidiaries, including netting opportunities. Small and Medium-sized companies: Neobanks are serving the financial needs of micro-businesses and SMEs by offering business cards, invoice management, expense management and bookkeeping and recording. ⇒ Potential FX-related improvement: seamless FX markets operations in different currencies with easy implementation via APIs. Travel: Participants are scrambling to bring many different customer needs—flights, hotels, conferences, events, tickets and others—under one place. Increasingly, this involves embedded financial solutions like payments, insurance, rentals and financing. ⇒ Potential FX-related improvement: embedded SWIFT and SEPA international payments in dozens of currency pairs. Commerce: Retail purchasing needs are increasingly addressed through ‘buy now pay later’ (BNPL) solutions and digital marketplaces with goods and services offered in seamless packages of payments solutions, consumer loans and loyalty programmes. ⇒ Potential FX-related improvement: guaranteed FX markets rates during predetermined time lapses. A broad reorganisation There are, quite obviously, a number of risks involved in the emerging global ecosystem economy. One such risk stems from unnerving geopolitical developments and their potential implications in terms of ‘de-risking’, supply chain disruption and broad changes in the regulatory environment. If, however, the business reorganisation centred around the customer proceeds along the lines suggested by the authors of the Ecosystem Economy, there would be opportunities for fintech companies to cover the financial aspects of the immense range of offerings that will be on display. And, like it or not, we live in a multi-currency world. In other words, ‘fintechisation’ goes hand in hand with automated currency management solutions.The time to act is now. 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 to get more information. Notice: JavaScript is required for this content.
The Stablecoin Reality Check: Unlocking Liquidity or Just Relocating the Traps?
Written by Sharyn Tan (Views are my own) In the ever-evolving world of finance, stablecoins have emerged as a beacon of hope for revolutionizing payments and liquidity management. Often touted as the “future of money,” these digital assets pegged to fiat currencies like the US dollar promise to bridge the gap between traditional finance and the blockchain era. But from a treasurer’s perspective, the burning question remains: Do stablecoins truly unlock stuck liquidity, making capital more accessible and efficient, or do they merely accelerate its movement while shifting where it gets stuck? This debate isn’t just academic—it’s central to how corporations manage working capital in a globalized, 24/7 economy. Let’s dive deeper. Stablecoins, such as USDT, USDC, and newer entrants like PYUSD backed by regulated institutions, are designed to maintain a stable value, making them ideal for transactions without the volatility of cryptocurrencies like Bitcoin. Their growth has been explosive: as of late 2025, the total market capitalization of stablecoins has surpassed $300 billion, with daily trading volumes often rivaling those of major fiat currencies. Proponents argue they represent a seismic shift in settlement infrastructure, offering always-on availability, blockchain transparency, and smart contract programmability—features that traditional banking rails, like SWIFT or ACH, have struggled to combine effectively. From a treasurer’s lens, this sounds transformative. Imagine a world where cross-border payments settle in seconds rather than days, reducing the infamous “float” that ties up billions in corporate treasuries annually. Stablecoins could minimize prefunding requirements, where companies must hold excess cash in accounts to cover potential delays or failures in transactions. Real-time visibility across markets would allow treasurers to optimize cash positions dynamically, turning payments into a strategic tool for liquidity management rather than a mere operational chore. In surveys of banking professionals, faster settlements rank as the top benefit of stablecoin adoption, cited by nearly half of respondents, followed closely by improved liquidity access. But here’s where the debate heats up: Are stablecoins genuinely freeing liquidity from its traditional traps, or are they just relocating those traps to new silos within the crypto ecosystem? The Case for Unlocking Liquidity: A Revolution in Motion On the optimistic side, stablecoins are seen as “better money” that enhances velocity—the speed at which capital circulates through the economy. Unlike bank deposits, which are often locked in low-yield accounts or subject to banking hours and holidays, stablecoins operate on decentralized networks that never sleep. This always-on nature can unlock trillions in “stuck” assets, such as those in real-world asset (RWA) tokenization, where illiquid properties or commodities become tradable fractions on-chain. For treasurers, this could mean pooling cash across borders without the friction of currency conversions, where regulatory permitted, boosting capital efficiency and reducing exposure to float risk. Stablecoins, integrated with payment platforms, enable real-time settlements using on-chain liquidity, where collateral like RWAs or yield-bearing assets keeps earning returns even while in use. This “split-yield” architecture, as seen in innovative protocols like STBL, separates principal from returns, ensuring liquidity isn’t sacrificed for yield. In DeFi applications, stablecoins provide the backbone for lending and borrowing, where AI-driven agents can automate arbitrage, routing, and yield allocation, turning idle capital into productive assets. Moreover, with regulated players like J.P. Morgan, Citibank and PineBridge entering the space, stablecoins are gaining treasury-grade compliance, making them viable for institutional use. This could lead to a “liquidity revolution,” where stablecoins not only speed up money but make it smarter, integrating with broader strategies like tokenized treasuries or possibly even government-backed digital stimuli. As some experts suggest, their real value lies in the opportunities for creating complementary business models that export digital dollars globally, enhancing sovereignty and credit creation. The Counterargument: Just Moving the Traps Faster Skeptics, however, argue that stablecoins don’t unlock liquidity—they simply relocate where it gets trapped, often in opaque or fragmented ecosystems. While they promise daily liquidity, many are backed by assets that aren’t always easily sold, echoing the risks of uninsured bank deposits. Historical parallels to national bank notes from the 19th century highlight this: stablecoins, like those notes, rely on issuer credibility, but without universal deposit insurance or capital buffers, they can amplify systemic risks during market stress. Interoperability remains a major hurdle. Liquidity in stablecoins is often siloed within specific blockchains or protocols, requiring bridges or swaps that introduce fees, delays, and counterparty risks—essentially recreating the prefunding traps of traditional finance but in a digital guise. For instance, while DeFi liquidity pools sound innovative, they’ve seen massive outflows when incentives dry up, with LP tokens rotating into other assets but not truly freeing capital for real-world use. Regulatory uncertainties add another layer: in jurisdictions without clear frameworks, stablecoins can trap liquidity in compliance limbo, limiting their scalability. Critics also point out that stablecoins’ current scale isn’t sufficient to drive broad market movements, with turnover still dwarfed by fiat systems. In treasury contexts, holding stablecoins might benchmark well against operations checklists for execution and routing, but it doesn’t eliminate the need for traditional buffers against volatility or redemption runs. A Treasurer’s Balanced Take: From Experiment to Operational Model As treasurers, we must navigate this debate pragmatically. Stablecoins aren’t a cure-all, but they offer tools for smarter liquidity when integrated thoughtfully. Start by assessing how they fit into your working capital strategy: Use them for high-frequency, low-value payments to test waters, then scale to other treasury operations like yield-optimized holdings or RWA-backed lending. The key is diversification—don’t let liquidity get trapped in one ecosystem; leverage multichain protocols for seamless flow. The exciting developments? With confidential smart contracts and AI agents enhancing privacy and automation, stablecoins are evolving beyond mere efficiency tools. Regulated innovations could tip the scales toward a true revolution, especially if they address the traps through better compliance and liquidity routing. So, what’s your view? Are stablecoins just an efficiency tweak, relocating liquidity traps at higher speeds, or the dawn of a liquidity revolution that frees capital for good? Lorena Pérez Sandroni, Treasury Masterminds Board Member, Comments Stablecoins in my opinion are more than an efficiency tweak. They solve real pain points:speed, transparency, programmability . But they also introduce new…
Why Financial Services Remain Frustratingly Hard to Navigate: A 30-Year Perspective
This article is written by HedgeFlows After three decades of watching both corporate and personal financial services, I’m convinced the fundamental problems haven’t changed — they’ve just gotten more sophisticated at hiding behind better interfaces. Last month, I watched a seasoned CFO of a £50M revenue company spend hours trying to understand whether they should hedge their Euro exposure. Despite running a financially sophisticated business, they couldn’t get straight answers from their bank about costs, timing, or even whether hedging made sense for their specific situation. The bank’s solution? A generic presentation about FX products and a suggestion to “start small and see how it goes.” This isn’t an isolated incident. It’s the norm. The Information Asymmetry Problem After 30 years of observing financial services from multiple angles—as a user, advisor, and now as someone building solutions—I’ve identified a fundamental issue that affects everyone from individual investors to mid-market companies: pervasive information asymmetry. Providers Don’t Really Know Their Customers Financial services providers excel at collecting historical data. They know what you’ve done, where you’ve banked, what products you’ve bought. But they’re remarkably poor at understanding what you’re trying to achieve or what challenges you’re facing next quarter, next year, or in the next phase of your business growth. This backward-looking lens means their “solutions” are often responses to problems you had yesterday, not the ones keeping you awake tonight. Customers Can’t Navigate the Complexity On the flip side, most companies—especially those outside the Fortune 500 or FTSE 100—simply can’t afford to have specialists in every area of finance. The CFO of a growing tech company might be brilliant at financial planning and fundraising, but they’re not necessarily experts in FX hedging, trade finance, or treasury optimization. This creates a knowledge gap that providers should fill but rarely do. Instead, they assume you know what you need and simply present options rather than guidance. The Transaction-First Mentality As a direct result of these information asymmetries, financial services have evolved into transaction machines rather than outcome optimizers. Banks sell FX products, not FX risk management strategies. Investment platforms sell access to markets, not investment success. The conversation typically goes: “Here are our FX hedging products” rather than “Let’s understand your business cycle, cash flow patterns, and risk tolerance, then design an approach that makes sense for you.” The Personal Finance Mirror These same dynamics play out in personal financial services, though this area is slowly improving. We’re seeing better apps, more intuitive interfaces, and wider access to investment products that were previously institutional-only. But even here, the improvement is mostly about democratising transactions rather than improving outcomes. Retail investors now have access to options trading, cryptocurrency, and complex ETFs — but are they getting better investment results? Are they making more informed decisions? Often, no. The focus remains on giving people more ways to trade rather than helping them achieve their actual financial goals: retirement security, home ownership, education funding, or wealth preservation. Why This Matters More Than Ever In today’s economic environment, the cost of financial services complexity has never been higher: Mid-market companies are particularly squeezed. They’re too sophisticated for basic banking products but not large enough to justify the white-glove treatment that major corporations receive. They’re stuck in the middle, often making suboptimal financial decisions not because they’re not smart enough, but because they don’t have access to the right information and guidance. The Path Forward The solution isn’t more products or better marketing. It’s fundamentally restructuring how financial services think about customer relationships. Instead of asking “What products can we sell this customer?” the question should be “What outcomes is this customer trying to achieve, and how can we help them get there?” This requires: 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 to get more information. Notice: JavaScript is required for this content.
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.
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.