Overcoming liquidity challenges for internal Cash Management & Treasury Operations

Despite the fact that intra-company trades are booked internally, the legal entities involved still rely on street infrastructure (including conventional cash accounts and SWIFT messaging) to complete their transactions.

This restricts visibility over the movement of funds intraday, while subjecting each participating entity to many of the same costs and friction as they would face for external transactions.

“The estimated total cost of intraday liquidity for large banks is $100-$300 million per year.”

Cash movements also serve to increase the downtime on assets as they move from one account to another – decreasing availability and leading to higher funding costs. A 2018 report from Oliver Wyman puts the estimated total cost of intraday liquidity at $100-$300 million per year for large banks.

The same report highlighted that firms could easily deliver a 25-50% reduction in intraday liquidity costs by adopting a more effective approach to liquidity management.

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