How to Maximise Cash Management and FX Exposures Effectively

It is a cliché but sadly true: In today’s market environment, uncertainty is the only certainty.

Over the past 12 months, we’ve seen major central banks support low interest rates, encourage borrowing and spending and aim to boost economic growth, even if it risks higher inflation. We are also seeing further geopolitical tensions continue to inject volatility into financial markets.

This creates a dual challenge for both institutional and private client with how to protect and optimise their cash holdings and how to manage FX exposures effectively.

Cash management

Cash management has evolved far beyond simply monitoring cash balances. It’s about strategic oversight, knowing exactly how much cash is available, where it’s held and when it’s needed. Done well, effective cash management not only meets your day to day needs, but also boosts the return on cash holdings.

Many clients keep funds in a single bank account or product, which can limit their returns and expose them to unnecessary risks. By adopting a dynamic strategy such as “laddering” funds across notice accounts, fixed-term deposits and instant-access accounts can help secure better yields, while ensuring liquidity when it matters especially to cover unexpected expenses when they arise.

Although opening new accounts can sometimes be painful and long, holding all your cash with a single bank can increase exposure to credit risk. Best practice recommends spreading funds across a variety of institutions and factoring in the bank’s credit rating during selection. When funds are placed with JTC’s approved banks, they benefit from daily monitoring and automatic alerts are generated for any breaches of predefined parameters, offering clients an additional layer of oversight.

For high-risk clients, opening multiple accounts can be both challenging and costly. In these cases, JTC have partner platforms that offer an efficient solution by enabling clients to diversify their holdings across a range of banks, while maintaining one primary bank account for operational transactions.

There are also alternative cash solutions, such as money market funds, which offer liquidity and yield while ringfencing funds. We have expertise in our investment colleagues which is headed up by Spencer Mariscal.

FX

Whether it’s converting funds to buy an asset, handling global dividends or managing oversea payments, FX timing and rates can materially impact a client’s bottom line. We continuously review FX pricing to add value to client relationships and benchmark rates with third-party providers for competitive pricing, compared to rates achieved directly with Banks.

Because FX markets are volatile, you are also able to use hedging tools, like forward contracts or options which can help reduce risk and protect value. Hedging is especially useful when:

• You know you’ll need to convert currency at a future date
• Budget certainty or return forecasting is important
• You’re dealing with regular FX flows and want to smooth volatility

Partner With JTC Treasury Experts

Our dedicated Banking and Treasury team is here to help. Even a brief discussion can help identify opportunities, unlocking new value for your portfolios and streamline your global operations.

To learn more about how our cash management and FX solutions can help you navigate market volatility and maximise the potential of your assets, please contact your JTC representative or reach out to the Treasury team directly.

Below is a summary of the types of clients you may be working with, along with examples of potential opportunities you might encounter:

To find out more about JTC’s banking and treasury, contact Shannon Carr directly or visit our dedicated page: Banking & Treasury