Liquidity Management

Global Liquidity Management -Unlock Trapped Working Capital

Effective cash management enables organizations to derive maximum benefits at minimal cost. For companies both large and small with global operations, managing liquidity has its own special challenges:

We design, develop and configure computer hardware and software for banks and other organizations in the financial services industry.

It can be difficult to gather even basic information about account balances and cash flows
Shared service centers, regional treasury centers, plants, offices or outlets may be located in countries that do not have freely convertible currencies
Balances may be held with multiple banking providers with varying reporting capabilities that can hamper the flow of useful information

FinnAxia Liquidity Management offers the following solutions:

Inter Company Loans
Multi-Bank Cash Concentration/Sweeps
Notional Pooling Services
Cash Flow Forecasting
Hybrid Pooling

FinnAxia supports Inter-company loan agreements/mandates and tracks all loans created under the agreement. It allows interest calculation and posting to be done as per applicable interests rates which may be fixed or floating. The loans can be in different currencies from countries where bank accounts are maintained by customer. Interest reallocation feature helps reallocation of interest to be charged / credited to different accounts.

Key Features

Flexible and parameterized solution for tailor-made offerings
Support client hierarchy to be defined and multiple layers of parent and child relationships can be mapped. These can be across multiple countries
ICL Agreement/Mandate can support maintenance of conditions attached to such loans such as currency, interest rates, capping limits.
Complete loan life cycle management including interest calculation and posting, reallocation to different accounts
Seamless Integration with downstream systems
Customer friendly banking reports

Benefits

Automatic tracking of loan lifecycle
Seamless reconciliation of loans against payments from parent or child
Efficiency enhancement for corporate and improved bank advisory capabilities for cash & liquidity management

Cash Concentration, module of FinnAxia’s liquidity management, works on principles of automatic fund transfer between master and child accounts to aggregate balances physically and achieves the mobilization and consolidation of the available balances to a master account.

FinnAxia Liquidity Management Cash pooling/Sweeps offers various criteria to determine fund movement basis for enhanced cash management

The balance to be left on the child account
Whether fund flows are uni-directional or bi-directional
The frequency and timing of sweeps
The layering and sequencing of the sweep activity
Automated balancing of liquidity in accounts held across banks through Multi Banking Cash Concentration
Controlled and parameterized discretionary checks through - Threshold Limits, minimum and maximum transaction limits

Notional pooling refers to the off set of interest income and expense (credit and debit interest), resulting from the varying cash positions in separate bank accounts held at the same bank. Notional Pooling Solution is particularly suitable for corporates with a decentralized treasury, which aims to preserve a certain level of subsidiaries cash management autonomy.

FinnAxia Liquidity Management-Notional Pooling offers:

Interest calculation methodologies to enhance interest payments
Automated interest distribution and rae-allocation
Minimal interest expense by off-setting debit and credit positions

The balances in accounts are pooled on a virtual/notional basis. Balances remain available in the individual accounts for Subsidiaries to meet their Working capital requirement.

Cash Flow Forecasts indicates likely future movement of cash in and out of the business. It's an estimate of the amount of money one expects to flow in (receipts) and out (payments) of business and includes all projected income and expenses. FinnAxia, Nucleus Software’s integrated transaction banking software provides proactive forecasting of corporate customer’s working capital. The module enables effective cash management through the following key elements:

Key Elements of the cash flow forecast

Income (Fund inflow): All the cash to be received, and credit sales of a particular month.
Expenses (Fund outflow): All the monthly expenses that drain actual cash out during that month.
Fund Analysis and Reports: A forecasted analysis and reports generated in tabular format or visual aided graphs

FinnAxia Liquidity Management supports setting up and execution of Hybrid Structures. In Hybrid Pooling – both notional pooling and sweeps can be used together to maintain credit and debit positions of various accounts in the book of the bank.

The funds consolidation happens in respective header account of the participating subsidiaries of corporate through sweeps; (Parent- Child relationship along with rules). The header accounts in each country then participate in the notional pool structure as a participant. Account balances get notionally pooled and interest calculated is reallocated as per the model selected.

FinnAxia Liquidity Management comes with the following features:

Setting up a Multi-bank, multi-entity, multi-country, multi-currency and multi time zone hybrid structure
Setting up of multi hierarchy structure comprising of sweeps and notional pool structure
Defining the structure with fields on customer, customer group, intra-bank, inter-bank, inter/intra corporate
Provision of adding existing sweep structures or notional pool structures to the hybrid structure

FinnAxia Global Liquidity Management helps banks enable complete visibility into cash positions for their corporate customers. This results in better utilization of available funds and reduced interest costs through short-term bank borrowings. Liquidity Management helps the bank setup and manage complex cash concentration and pooling structures for automated fund transfer and consolidation within the group.

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FinnAxia Business Internet Banking is a delivery channel for bank’s customers, offering convenience to bank anytime and anywhere. It allows banks to provide easy access to information from multiple back-end systems as relevant data into a single customer view.

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By assisting our systems with flexibility in launching new products and credit evaluation, CAS retail module from Nucleus’ state of the art, FinnOne™ suite, will allow us to go more aggressive in the consumer segment and penetrate the consumer lending market more effectively.

- Mr. Danilo A. Alcoseba, President and CEO, Philippine Business Bank
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