Cash Management Solutions — Flinq Insights

Cash management is the cornerstone of financial efficiency for any business, but for Trust and Corporate Service Providers, it takes on an additional dimension. TCSPs are not just managing their own cash — they are managing the cash of hundreds or thousands of client entities across multiple banks, currencies, and jurisdictions. Getting it right can transform client outcomes and create significant new revenue streams. Getting it wrong means missed opportunities, operational inefficiency, and dissatisfied clients.

In this article, we explore practical strategies for improving cash management, examine real-world applications, address common challenges, and show how Flinq is helping TCSPs unlock the full potential of their client cash.

Introduction to Cash Management

At its simplest, cash management is the process of collecting, managing, and investing cash to ensure that funds are available when needed and surplus cash is put to productive use. For TCSPs, this means ensuring that every client entity’s cash is held in the right place, earning the best available return, and accessible when required for payments, distributions, or investments.

The challenge is scale. A TCSP might manage 500 entities, each with accounts at two or three different banks. That is potentially 1,500 bank accounts to monitor, reconcile, and optimise. Without the right tools and strategies, this becomes an impossible task — and client cash ends up sitting idle in low-yielding current accounts simply because there is no practical way to manage it more effectively.

Strategies for Improving Cash Flow and Yield

Dynamic Cash Pooling

Dynamic cash pooling is an approach where surplus cash across client accounts is identified and strategically placed to maximise returns. Unlike traditional physical cash pooling — which involves co-mingling funds in a single master account — dynamic cash pooling keeps client funds segregated while still optimising placement.

The process works by continuously analysing cash positions across all accounts, identifying surplus balances that are not needed for near-term obligations, and recommending or automatically executing placements into higher-yielding products such as fixed deposits or notice accounts.

The key advantage of dynamic cash pooling is that it delivers many of the yield benefits of traditional pooling without the regulatory complexity and risk of co-mingling client funds.

Optimised Liquidity Management

Effective liquidity management is about ensuring that the right amount of cash is available at the right time. Too much liquidity means cash is sitting idle and underperforming. Too little means payments cannot be made on time, creating operational and reputational risk.

Optimised liquidity management requires a clear understanding of each client’s cash flow patterns — when do payments come in, when do obligations fall due, what is the minimum balance that must be maintained? With this understanding, surplus cash can be confidently placed in higher-yielding products, knowing that sufficient liquidity is always maintained.

For TCSPs, this requires visibility across all accounts and all banks — something that is virtually impossible to achieve manually but straightforward with the right technology platform.

Real-Time Cash Flow Monitoring

Real-time visibility is the foundation of effective cash management. If you cannot see where your cash is, how much you have, and what is moving, you cannot make informed decisions about placement and optimisation.

Real-time cash flow monitoring means having a consolidated, up-to-the-minute view of all client cash positions across all banking partners. It means knowing instantly when a large deposit arrives, when a balance falls below a threshold, or when an expected payment has not been received.

This visibility enables proactive management rather than reactive firefighting. Instead of discovering a cash surplus days after it arrives — by which time the opportunity to place it has been missed — you can act immediately and capture the yield benefit from day one.

Client Segmentation

Not all clients are the same, and their cash management strategies should not be the same either. Client segmentation involves categorising clients based on their cash management needs, risk profiles, and objectives.

Some clients may prioritise liquidity above all else — they need instant access to funds and are willing to accept lower yields. Others may have significant surplus cash with no near-term requirements, making them ideal candidates for longer-term fixed deposits with higher returns.

By segmenting your client base, you can develop tailored cash management strategies that align with each client’s specific needs. This personalised approach delivers better outcomes and strengthens the client relationship.

Case Studies

Maximising Yield for a Family Office Portfolio

A TCSP managing a portfolio of family office structures identified that over 60% of client cash was held in current accounts earning minimal interest. By implementing a systematic approach to cash placement — using fixed deposits for long-term surplus and notice accounts for medium-term funds — the TCSP was able to increase the average yield across the portfolio by over 150 basis points. For the clients, this translated into meaningful additional income. For the TCSP, the margin on improved yields created a significant new revenue stream.

Streamlining Operations Across Multiple Jurisdictions

A multi-jurisdictional TCSP with offices in three countries was spending an estimated 40 hours per week on manual cash management tasks — downloading statements, reconciling balances, and producing reports. By centralising these activities through a single platform with connectivity to all banking partners, the firm reduced this to under 5 hours per week. The time saved was redeployed to client-facing activities, improving service quality and enabling the firm to take on additional clients without increasing headcount.

Common Challenges

Impact on Bank’s Balance Sheet

When a TCSP optimises cash placement — moving funds from current accounts to fixed deposits or between banks to secure better rates — it can have an impact on the banking partner’s balance sheet. Banks rely on stable deposits for their own funding and liquidity requirements. Frequent movements or large withdrawals can create tension in the relationship.

The solution is transparency and communication. Keep your banking partners informed about your cash management strategy, give them advance notice of significant movements, and work collaboratively to find arrangements that benefit both parties.

Resource-Intensive Systems

Many TCSPs still rely on manual processes and spreadsheets for cash management. While this may work for a small portfolio, it quickly becomes unsustainable as the business grows. The risk of errors increases, the time required escalates, and the opportunity cost of cash sitting idle mounts.

Transitioning from manual processes to a technology-driven approach requires investment — in the platform itself, in data migration, in training, and in change management. However, the return on this investment is typically rapid and substantial. Flinq’s platform is designed for quick deployment, with most implementations completed in six weeks or less, ensuring that the transition is as smooth and painless as possible.

Integration Complexities

Integrating with multiple banking partners, each with their own systems, formats, and protocols, is one of the most significant technical challenges in cash management. Statement formats vary, payment file requirements differ, and connectivity options range from manual download to SFTP to API.

Flinq addresses this challenge by providing pre-built integrations with a wide range of banking partners. Our platform handles the complexity of different formats and protocols, presenting a unified view regardless of which bank the data comes from. This means TCSPs can focus on managing cash rather than managing integrations.

The Bottom Line

Effective cash management is not a nice-to-have — it is a competitive advantage. TCSPs that manage client cash proactively and strategically deliver better outcomes for their clients, generate additional revenue, and operate more efficiently.

The tools and strategies exist to transform how you manage client cash. Dynamic cash pooling, optimised liquidity management, real-time monitoring, and client segmentation are all within reach — and with the right technology partner, they can be implemented quickly and cost-effectively.

As Warren Buffett famously said: “Do not save what is left after spending, but spend what is left after saving.” For TCSPs, the equivalent wisdom is this: do not leave client cash idle after meeting obligations — put it to work and let it earn.

Get in Touch

If you are a TCSP looking to enhance your cash management capabilities, increase client yields, and create new revenue streams, we would love to hear from you. Flinq’s platform is purpose-built for TCSPs, and we are confident we can help you unlock the full potential of your client cash.