Treasury Services for TCSPs: A New Revenue Stream for Offshore Firms

For most TCSPs, the core business has always been administration — entity formation, compliance, accounting, and corporate governance. These are essential services, but they operate in an increasingly competitive market where fees are under pressure and differentiation is hard.

What if there was a way to enhance your client offering, deliver measurable value, and create a new revenue stream — all without straying far from what you already do?

Enter Treasury Services.

What is a Treasury Services Function?

A Treasury Services function within a TCSP provides clients with professional management of their cash and financial assets. It sits alongside your existing administration services and focuses on optimising how client funds are managed, moved, and grown.

There are three core pillars:

FX Management

Foreign exchange is a daily reality for most TCSPs. Clients hold multi-currency accounts, make and receive payments in different currencies, and are exposed to FX risk whether they realise it or not.

Today, most FX activity within TCSPs happens reactively — a payment needs to be made in USD, so someone converts GBP to USD at whatever rate the bank offers that day. There’s no strategy, no benchmarking, and no transparency for the client.

A Treasury Services function changes this:

• Proactive FX management: Monitor client exposures and execute conversions at optimal times, not just when a payment is due.
• Rate benchmarking: Compare rates across banking partners and FX providers to ensure clients get competitive pricing.
• Hedging strategies: For clients with predictable FX needs, implement forward contracts or other hedging instruments to reduce risk.
• Transparency and reporting: Provide clients with clear reporting on FX activity, rates achieved, and savings delivered.

The revenue opportunity here is significant. TCSPs can earn a margin on FX transactions, charge advisory fees for hedging strategies, or both. And clients benefit from better rates and professional management of their currency exposures.

Cash Management Solutions

Many TCSP clients have significant cash balances sitting in current accounts earning little to no interest. This is a missed opportunity for both the client and the TCSP.

A Cash Management function looks at the totality of a client’s cash position and optimises it:

• Sweep arrangements: Automatically move excess balances from current accounts into higher-yielding deposit accounts.
• Term deposit placement: Place client funds in term deposits across banking partners to maximise returns while maintaining liquidity requirements.
• Cash pooling: For clients with multiple entities, consolidate cash positions to reduce borrowing costs and maximise interest income.
• Liquidity planning: Work with clients to understand their cash flow needs and structure their holdings accordingly.

The value to clients is clear — their money works harder. The value to TCSPs is equally clear — you can charge management fees, earn placement commissions, or share in the uplift generated.

Cash-Related Products

Beyond FX and cash management, there are adjacent products that a Treasury Services function can offer:

• Money market fund placements: For clients seeking yield with daily liquidity, money market funds can be an attractive option. TCSPs can facilitate placements and earn trail commissions.
• Structured deposits: Some banking partners offer structured deposit products with enhanced yields. A Treasury function can identify and place these on behalf of clients.
• Loan and credit facility coordination: While TCSPs typically don’t lend directly, they can coordinate with banking partners to arrange credit facilities for clients — earning referral fees or arrangement commissions.
• Payment optimisation: Analysing payment patterns to identify opportunities to reduce costs — batch processing, optimal timing, payment routing.

How Treasury Services Benefit Your Clients

The client value proposition is straightforward:

• Better returns on cash: Professional management of deposits and FX means clients earn more on their idle cash and pay less on currency conversions.
• Risk reduction: Proactive FX hedging and diversified deposit placement reduce financial risk.
• Transparency: Clear, regular reporting on cash positions, FX activity, and returns gives clients visibility they’ve never had before.
• Convenience: Clients get a single point of contact for their banking and cash management needs, rather than having to manage it themselves across multiple banks.
• Professional governance: Particularly for regulated structures, having a documented, professional approach to cash and treasury management strengthens governance and compliance.

Structuring Treasury Services as a Revenue Stream

The beauty of Treasury Services is that there are multiple ways to generate revenue:

• Management fees: Charge a fixed or percentage-based fee for ongoing treasury management.
• Transaction margins: Earn a spread on FX transactions executed on behalf of clients.
• Placement commissions: Earn commissions from banking partners or fund providers for placing client deposits or investments.
• Performance fees: Share in the uplift generated through better cash management — aligning your incentives with your client’s outcomes.
• Advisory fees: Charge for specific treasury advisory engagements, such as developing a hedging strategy or cash management policy.

The key is transparency. Clients should understand how you’re compensated and see the value you’re delivering. When done right, Treasury Services is a win-win — clients get better outcomes, and the TCSP earns meaningful, recurring revenue.

Why TCSPs in Offshore Jurisdictions are Uniquely Positioned

TCSPs in offshore jurisdictions like the Channel Islands, BVI, Cayman, and others have a natural advantage when it comes to Treasury Services:

• Multi-currency exposure: Offshore structures inherently deal with multiple currencies, creating natural demand for FX management.
• Significant cash balances: Many offshore structures hold substantial cash positions that are ripe for optimisation.
• Multiple banking relationships: With accounts across several banks and jurisdictions, there’s real opportunity for deposit optimisation and cash pooling.
• Client trust: TCSPs already hold a position of trust as the administrator of their clients’ structures. Extending into treasury management is a natural evolution, not a leap.
• Regulatory familiarity: Operating in regulated environments means TCSPs already have the compliance infrastructure to support treasury activities.

Conclusion

Treasury Services represents one of the most compelling opportunities for TCSPs to evolve their business model. It enhances client service, creates differentiation in a competitive market, and generates meaningful new revenue.

The TCSPs that move first will establish themselves as leaders in this space. Those that wait will find their clients looking elsewhere for these services.

At Flinq, we’re building the tools that make Treasury Services practical and scalable for TCSPs. From FX management to cash optimisation to multi-bank connectivity, our platform is designed to support this evolution. Let’s discuss how Treasury Services could work for your firm.