The term "inhouse banking" refers to the centralized processing and management of bank-like financial activities within a company or corporate group. A central treasury or finance department takes over functions that would otherwise partly be handled by external banks, such as intercompany payments, cash pooling, liquidity management, internal loans, or currency management.
Internal Account Management: Managing virtual or internal accounts for subsidiaries, business units, or branches.
Intercompany Payments: Processing, consolidating, and settling payments between affiliated companies within a corporate group.
Cash Pooling: Centralizing and managing liquidity across different entities, accounts, countries, or currencies.
Payment Factory: Centralized processing, approval, and execution of payment orders for multiple business units.
Netting and Settlement: Offsetting intercompany receivables and payables to reduce payment volumes and banking costs.
Internal Loan Management: Managing intercompany loans, interest rates, maturities, repayments, and interest calculations.
Liquidity Planning: Forecasting, analyzing, and managing available cash at both entity and group level.
Interest and Fee Calculation: Automatically calculating internal interest, service fees, or transfer pricing for internal financial services.
Currency and Risk Management: Supporting the management of foreign currency positions, exchange rate risks, and group-wide financial risks.
Bank Connectivity and Payment Formats: Integrating with banks, ERP systems, and payment formats such as SEPA, ISO 20022, or local payment standards.
Compliance and Approval Workflows: Mapping approval processes, user permissions, control mechanisms, and audit-proof documentation.
Reporting and Treasury Dashboards: Creating reports on liquidity, payment flows, internal accounts, risks, and financial positions.
An international corporate group uses a central treasury department to submit payments from several subsidiaries to external banks in a bundled process.
A group of companies maintains internal accounts for its local entities so that intercompany receivables and payables can be settled efficiently.
A retail company uses cash pooling to make surplus liquidity from individual subsidiaries centrally available.
An industrial company manages intercompany loans between the parent company and subsidiaries using inhouse banking software.
A global enterprise reduces external bank transactions through netting, thereby lowering transaction costs and administrative effort.
