However, the journey of establishing an in-house bank isn’t devoid of challenges. It’s a tapestry of intricate operations, ranging from meticulous intercompany lending practices to the subtleties of FX management. This vast array mandates stringent controls and oversight. Gisele Benetollo, head of cash management at Electrolux, discussed the intricacies of her journey and shed light on the importance of continual communication throughout this complex implementation process, emphasising the need for alignment across all stakeholders.
“We have implemented in-house bank for payments and all intercompany transactions, and currently we are on the journey to evaluate moving collections to the in-house bank, therefore we still have physical accounts in each country,” she shared, illustrating the traditional system they had, where customers would pay into these accounts, and funds would be channelled through the company’s cash flow. This setup, while functional, didn’t offer the agility and centralisation that an in-house banking system could provide.
Benetollo highlighted that the transformation to an in-house bank was not merely about switching systems. It was about adopting a mindset shift across the organisation. This meant adapting to new systems and processes while ensuring that operations remained consistent across various regions.
“We are on the journey to evaluate moving collections to the in-house bank”
Gisele Benetollo, Head of Cash Management at Electrolux
Reflecting on the transformation, Benetollo further shared, “After the implementation, system and processes are robust and seamless… we work in a very efficient way. I think we have learned a lot throughout the project.” This testament not only underscored the value the in-house bank brought to Electrolux but also highlighted the learning curve and adaptability required to make such a system work optimally.
Expanding on the subtleties of implementing in-house banks, Ramachandran also touched on the importance of getting everybody on board early in the process. “Early engagement with stakeholders, especially business teams is needed in order to have a picture of what the ultimate solution could look like,” Ramachandran shared. This planning and foresight, according to her, are crucial to maximising the efficiency of in-house banks.
For example, the implementation of collections on behalf – which requires a company’s costumer to pay into virtual account numbers – requires careful change management. Essentially, virtualisation of the corporate bank account structure removes the need for most physical accounts. Instead, it connects a theoretically unlimited number of unique aliases, or virtual, account numbers to a single (or more if required) traditional physical master bank account.
In the grand scheme of things, the advent of in-house banking signifies a paradigm shift in corporate treasury management. By offering tighter controls, transparency, and a centralised approach, it bestows businesses with the competitive edge they need in today’s dynamic markets. As corporations continue to evolve and scale new heights, in-house banking promises to be their stalwart companion, reshaping financial narratives and setting new benchmarks in corporate treasury and financial operations.
This article was first published on the EuroFinance website and can be viewed here.