SOLUTIONS / FINANCIAL INSTITUTIONS
Liquidity decisions and pricing that reflect the economics
For banks and neobanks reviewing treasury, ALM and profitability management, and for EMI and payment businesses developing a treasury framework suited to their operating model.
Where we can help
Liquidity is dispersed across correspondents and group entities
Operational balances may be larger than necessary while available funds earn less than they could. We review correspondent relationships, currency and entity requirements, liquidity reserves and eligible placement options.
OUTCOME
A liquidity policy and account structure that distinguish required operating balances from genuinely available funds, with placement criteria and counterparty limits.
Financial risk and funding costs obscure business margins
For a bank, an apparently strong customer margin can include gains or costs arising from liquidity, interest rate or currency risk. We develop ALM and FTP methods to assign internal funding costs and separate customer margins from treasury risk results.
OUTCOME
A clearer basis for comparing products, business lines and transactions, and for reviewing prices and balance sheet decisions.
The true contribution of products and clients is unclear
Reports may show revenue without a consistent allocation of operating costs, funding and relevant financial risks. We define the profitability methodology and connect it to accounting data and management decisions.
OUTCOME
Comparable profitability by the agreed dimensions, with calculation models and reporting that management can use repeatedly.
Management needs a clearer view of exposure and performance
Separate treasury and finance reports may not explain how a change in the balance sheet affects liquidity, risk and earnings. We define the measures and scenarios needed by management and, for banks, ALCO.
OUTCOME
Consistent assumptions, risk limits and decision papers, with responsibilities for maintaining them.
Scope adapted to the institution
Banks and neobanks
Liquidity, interest rate and FX risk, ALM, FTP and treasury P&L, linked to product profitability.
EMIs and payment businesses
Corporate liquidity and reserve planning, banking dependence, FX exposure, cost and profitability analysis, with specialist input on relevant regulatory requirements. Safeguarded customer funds are considered separately from the institution’s own money.
Starting point
A diagnostic review or defined methodology project
Draw on the founder’s financial industry experience of 25 years. Commission a diagnostic or a defined methodology project, with scope and deliverables agreed around your institution’s needs.