One of the oldest, yet the most popular means of liquidity management is the physical movement of funds from disparate accounts into a lead concentrator account or consolidation account. This technique helps the corporate user to focus his attention on a set of fewer accounts for optimization and investment purposes.

Earlier the most popular 'sweep' type was 'end of day zero balancing' and it still remains the most sought after liquidity management technique. However as business requirements grew liquidity management moved from end of day activity to an intra day activity and as the practice stands today liquidity is managed every minute and every second.

Intellect Liquidity has the most comprehensive sweeping functionality with various sweep types and flexible frequencies.

Notional Pooling functionality overcomes some of drawbacks that sweeps or physical cash concentration have. One of these is the currency conversion cost in case of cross currency transfers. Another being charges banks take for cross border movement of funds. In order to avoid these overheads a corporate could choose to notionally pool its credit and debit balances held with a bank. There is no physical movement of funds and the bank pays interest on the clubbed balance. This helps the corporate save on interest costs. The corporate treasurer may decide to share the interest it saves due to notional pooling with the accounts that form part of the notional pool. There are various modes of interest distribution depending on the business strategy.

Intellect Pooling module supports both simple and aggregate pools in a single currency or multiple currencies and also has flexible, parameterized interest setup functionality. There are various models that Intellect Pooling supports for distribution of interest saved. It also offers other useful functions such as simulation pools, sub products and quick setups.

Notional Pooling is regulated across the globe and there are various countries where it is not permitted. Intellect Liquidity has certain smart techniques as part of the product using which the bank is able to give the corporate the benefit of notional pooling without compromising on the local regulations.

Maximizing returns on idle balances

Once the corporate treasurer has consolidated the available cash in a lead concentrator account, and nullified his debit positions, the surplus cash is utilized for investments.With sophisticated Cash Forecasting tools available, the investment activity can be carried out multiple times in a day into different investment vehicles.

Intellect Liquidity has an advanced investment sweeps module with rule based movement of funds into various investment options.

Corporates require automated and accurate cash forecasting solutions to enable better cash utilization. Further, M&A activities and regulatory pressures around management of liquidity risks are forcing corporates to review their cash flow forecasting infrastructure. This has given banks an opportunity to intermediate in a space that has been historically served through the treasury workstations.

A recent survey indicates a significant chunk of corporates are willing to migrate to solutions offered by banks. Offering CFF solutions over existing infrastructure such as Portals, Payment systems, SWIFT interfaces etc gives banks a lever to further enhance customer loyalty. This provides the ability to cross sell more downstream products required as a result of the cash flow forecasts, for e.g. short term investments.

Intellect CFF is a Cash flow forecasting solution which can be hosted on a bank’s portal. Cash Flow information from client’s AR/AP systems or ERP platforms, Treasury, FOREX and Payment systems can be uploaded to offer a single window display of cash positions as well as options for investment and borrowings.