Target Balancing – Automation of Liquidity and FX Risk Management for Banks Company Clients

Target Balancing

“Managing and optimizing liquidity across multiple accounts is a necessity for most businesses. Companies operating internationally face the additional complexity and risks of handling accounts in different currencies. The Target Balancing module is designed to help company clients of banks address these challenges in a robust, easy and automated way.

Once the policy settings are defined, the system schedules automatically run at the specified frequency and time to check the real-time balances of the accounts in scope. The system automatically initiates a transfer or trade and instantly settles the top-up or sweep. Any changes? Users can manage everything themselves, with a full audit trail and reporting functionality.” – Niels van Daatselaar, Co-founder and CEO of TreasurUp

Target Balancing: Designed By Treasurers For Treasurers

The Target Balancing module is tailored for finance professionals – like Treasurers, Cash Managers, Controllers, or CFOs – allowing them to set and automatically execute clear policies regarding the liquidity held in multiple accounts. 

These policies can for example address the following questions:

1. What is the desired target balance for each account?
2. Where should any extra funds go?
3. Which accounts (or bank products) should cover any shortfall?
4. What are the limits for each transaction?
5. What is the timing and the frequency for maintaining the balance?

Automatically generate sweep or top-ups to meet the user-defined target balance.

3 Main Versions of Target Balancing:

1) Cross-currency:

Generate sweeps or top-ups between different currency accounts via FX trades.

2) Domestic:

Generate sweeps or top-ups between accounts of the same currency held at the same bank.

3) Cross-Border:

Generates sweeps or top-ups between accounts held at different banks.

6 Ways Your Bank Can Benefit From Offering Target Balancing:

1. It’s a simple yet powerful tool to help your clients automate a repetitive process. 
2. It generates a recurring stream of business. Set once, benefit continuously.
3. It is a white-label solution. It seamlessly integrates into your bank portal.
4. It caters to many clients, from the lower to upper tier of your company clients’ portfolio.
5. It makes it easy to onboard new clients.
6. It facilitates cross-department integrations: this versatile tool can combine products from FX, cash management, lending, investment, etc.

Automating the Complexity of Multi-Account Liquidity

For companies operating internationally, managing liquidity across multiple accounts in different currencies is a daily operational challenge.

The Target Balancing module addresses this by allowing treasurers to define policy settings that the system executes automatically at specified frequencies. Real-time balance checks trigger transfers or trades that instantly settle top-ups or sweeps, eliminating manual processes and reducing operational risk.

As Niels van Daatselaar, CEO of TreasurUp, explains: “Once the policy settings are defined, the system schedules automatically run at the specified frequency and time to check the real-time balances of the accounts in scope.”

Three Versions for Every Business Need

Target Balancing comes in three main versions to address different corporate requirements. Cross-currency balancing generates sweeps or top-ups between different currency accounts via FX trades, ideal for multinational companies managing foreign currency exposure.

Domestic balancing handles same-currency transfers between accounts held at the same bank. Cross-border balancing executes sweeps between accounts held at different banks, providing maximum flexibility for complex treasury structures.

This versatility makes Target Balancing relevant for a wide range of clients, from SMEs with a handful of accounts to large corporates with hundreds of bank relationships across multiple jurisdictions.

Strategic Value for Banks Offering Target Balancing

Banks that deploy Target Balancing gain a powerful tool for client retention and revenue generation. The module creates a recurring stream of business; once configured, it generates an ongoing transaction flow automatically.

The white-label solution integrates seamlessly into existing bank portals, making onboarding frictionless for new clients.

Cross-journey integration amplifies the value further. Target Balancing connects with Cash Visibility to display automatically categorized cash flows, and with FX modules to provide complete trade reporting. Banks can combine products from FX, cash management, lending, and investment departments into a single client experience, transforming siloed products into an integrated treasury management platform.

Cross-Journeys with Other Modules:

1) Cash Visibility

1. Set up target balancing rules directly from the Cash Visibility module.
2. View the cash flows from Target Balancing automatically categorized in Cash Visibility.

2) FX

1. Use spot or swap trades to settle cross-currency Target Balancing scenarios.
2. Set up target balancing rules directly from the FX module.
3. View all the trade details from Target Balancing in the FX trade reports.

Ready to Elevate Your Banking Solutions?

Contact us today to learn how your bank can integrate Target Balancing and to see the module in action.