Treasury is often set up as and considered to be a service centre, so the idea of an in-house bank (IHB) is not far-fetched. The in-house bank functions as a dedicated entity within an organisation, providing a suite of banking services tailored to meet the diverse needs of internal business units.

Rather than relying on external financial institutions, an in-house bank mirrors the services offered by traditional banks, offering a range of solutions, including payments, liquidity management, cash visibility, FX requests, funding, and working capital management. This innovative approach streamlines financial processes and empowers organisations to enhance cash flow efficiency while reducing dependency on external banking partners.

To successfully run an in-house bank, you need the following key elements:


Technology and Integration

  • Use treasury management systems (TMS) with in-house banking capabilities to enable automated processes, tracking, and interest calculations. The world-class IT2 treasury management system has all the capabilities to run an in-house bank.
  • Ensure seamless integration between the in-house bank and the organisation’s ERP systems to streamline data flow and minimise manual work.


Centralised Control and Visibility

  • Establish internal current accounts for subsidiaries within the in-house bank structure
  • Define balance limits and review them centrally based on the treasury policy
  • Gain full visibility into subsidiary balances to enable better working capital management and risk identification

Automated Processes

  • Route all payments and receipts through the in-house bank to ensure a centralised and automated payment process

Liquidity Management

  • Pool all cash and credit balances to command better rates for loans and investments
  • Manage internal lending, with subsidiaries borrowing from the in-house bank at lower rates compared to external banks

Regulatory Compliance

  • Be aware of regulations in all operating countries and ensure compliance with local laws
  • Monitor prospective regulatory developments to assess the feasibility of adopting or maintaining an in-house bank

Skilled Resources

  • Ensure the involvement of both the financial department (accounting, treasury, tax, and legal) and the IT department
  • Combine expertise in operations and technology to successfully implement and manage the in-house bank. TreasuryONE is ideally positioned to run an in-house bank on behalf of clients. The result is a cost-effective solution with highly skilled treasury staff who deeply understand the IT2 treasury system.

The Advantages of In-House Banking:

Treasuryone-south-africa-erp-bank-tms-connectivity-step-1Centralised Control: Centralised control is at the heart of the in-house banking model, enabling organisations to gain unprecedented oversight and management of their financial operations. Companies can mitigate risks by consolidating global payment processes, financing, and FX risk management while optimising treasury functions.

Treasuryone-south-africa-erp-bank-tms-connectivity-step-2Enhanced Liquidity Management: Organisations can optimise liquidity utilisation and ensure timely fund allocation across subsidiaries through centralised cash management and automated cash pooling. Real-time visibility into cash positions facilitates informed decision-making, enabling swift responses to evolving market conditions.

Treasuryone-south-africa-erp-bank-tms-connectivity-step-3Cost Optimisation: Implementing an in-house bank reduces external banking costs and minimises transaction fees associated with third-party processors. Consolidating banking relationships enhances negotiating power, resulting in cost savings and improved service quality.

Treasuryone-south-africa-erp-bank-tms-connectivity-step-4Streamlined Processes: Automated reconciliation and standardised payment processes streamline financial operations, improving efficiency and accuracy. Organisations can enhance productivity and reduce manual errors by automating month-end activities and inter-company transactions.

Treasuryone-south-africa-erp-bank-tms-connectivity-step-5Harmonised Payment Processes: In-house banking facilitates seamless integration of internal and external payment processes, eliminating the need for separate netting solutions. Payments-on-behalf-of (POBO) and Collections-on-behalf-of (COBO) mechanisms simplify transaction processing, reducing reliance on external accounts.

Treasuryone-south-africa-erp-bank-tms-connectivity-step-6     Enhanced Visibility: Organisations gain comprehensive visibility into subsidiary balances with an in-house bank, enabling effective cash management and strategic decision-making. By centralising cash pools, companies can optimise interest earnings and customise financing solutions based on subsidiary needs.


While implementing an in-house bank presents challenges, the long-term benefits far outweigh the initial investment. Organisations can revolutionise financial operations by fostering collaboration across departments and leveraging technology, driving efficiency, visibility, and cost savings. Embracing in-house banking is a strategic decision and a catalyst for transformative change in the modern business landscape.