For trust and fund administrators or corporate service providers, the internal banking and treasury team plays a crucial role in facilitating client offerings.
While distinct from banks, the department acts as an intermediary, aiming to serve as an extension of banks themselves.
Not being the bank
For internal Banking and Treasury teams it is important they establish and maintain a clear distinction from banks. While they may handle financial matters and transactions on behalf of clients, they do not operate as banks themselves. They must demonstrate this distinction by adhering to regulatory requirements, establishing robust compliance frameworks, and ensuring transparency in operations and reporting.
Benefits to a bank
This department plays a pivotal role in a client’s Banking relationship. By acting as extensions of the banks, they streamline interactions between clients and the banks, facilitating seamless transactions, and ensuring compliance with regulatory obligations. Providing valuable administrative, reporting, and operational support, allowing banks to focus on core Banking functions while leveraging the expertise and specialised services of these providers.
The importance of Banking and Treasury teams within an organisation and their value in client-bank relationships
One of the primary benefits of having an internal Banking and Treasury team is the ability to consolidate client relationships. By centralising financial activities within the organisation, this team becomes the point of contact for all Banking and Treasury-related matters. This consolidation streamlines communication, reduces administrative complexities, and enables a more comprehensive understanding of clients’ financial needs and objectives.
This understanding facilitates the customisation of Banking services and solutions to align with clients’ specific requirements. By leveraging the knowledge of their clients’ financial positions, cash flow cycles, and risk appetites, the internal team can provide tailored solutions and strategies to optimise financial operations and mitigate risks.
It is vital that the team are well-versed in the regulatory landscape and ensure adherence to relevant guidelines, safeguarding clients’ financial interests. By implementing robust internal controls, conducting regular audits, and monitoring transactions, these teams mitigate the risk of fraud, unauthorised activities, and non-compliance.
While clients may not immediately recognise the cost optimisation benefits of an internal Banking and Treasury team, they indirectly benefit from the expertise and negotiation power of these teams. By consolidating banking relationships and leveraging combined balances under management, the internal team can negotiate favourable rates, reduced fees, and improved terms with financial institutions. These savings can have a positive impact to clients in the form of more competitive pricing for products and services.
The advantages of working with multiple Banking partners
It is essential to work with multiple banking partners on behalf of clients. By doing so, it enables the ability to offer a broader range of banking options, allowing clients to choose the most suitable financial institutions for their specific needs. This approach provides clients with increased flexibility, access to specialised services, and competitive pricing. Moreover, working with multiple banking partners reduces the risk of overreliance on a single bank, enhancing resilience and mitigating potential disruptions in the banking relationship.
Hiding in the shadows
Even though clients may not be aware that an internal Banking and Treasury team exist within a company, there are numerous benefits that they indirectly enjoy. From consolidated relationships and customised solutions to enhanced efficiency, risk management, and cost optimisation, this sometimes invisible team can play an important role in supporting clients’ financial objectives and ensuring smooth banking operations.
Not all heroes wear capes.
How can JTC help?
We leverage fintech capabilities to stay ahead, to position ourselves as trustworthy and forward-thinking partners, to ultimately strengthen our competitive advantage and build stronger, more trusted relationships with our clients. The mutual beneficial relationships built between Fintechs/Banks and JTC, accompanied with future payments innovation, promises increased collaboration, dynamic growth, and mutual benefits for both our clients and JTC.
To find out more, please contact Paul Fosse directly.