Roche integrated an in-house bank (IHB) more than two decades ago to establish a centralised treasury function, optimising cash and liquidity management across the group.
By implementing the IHB as the sole communicator with banks for the Roche Group, treasury was able to generate efficiencies through automation and transparency in intercompany payments because they are now settled internally rather than via commercial banks, reducing transaction costs and processing times.
The IHB consolidates FX exposures and allows for centralised hedging, reducing volatility and optimising risk management and we reduced counterparty risk by optimising the number of bank relationships and bank accounts. This also helped streamline cash management activities including treasury payments, overall bank communication and product selection and boosted our ability to negotiate with our banks.
Some of the key lessons we learnt include the need to balance automation with human expertise. While technology plays a crucial role in treasury transformation, skilled professionals remain essential for interpreting data, making strategic decisions and managing stakeholders and their exceptions.
A phased approach to transformation is also important. The IHB was gradually expanded in its early phase rather than implemented all at once, allowing for testing, learning and refinement. A dedicated Treasury IT team was one of many key success factors too. We established an eye-to-eye partnership with IT, Shared Services, banking partners, and internal finance teams, which contributed to the successful output of the IHB implementation. IT played a key role in integrating systems, while bank partners provided strategic insights and operational support.
A new implementation must either replace something existing to something better or truly add value in order to be justified. An IHB not only replaces decentralised banking structures with a more streamlined, efficient treasury model but also creates a positive impact by improving cash visibility, enhancing FX risk management and optimising banking relationships.
If a company operates in multiple markets, with multiple bank relationships, accounts and decentralised treasury management, an IHB can be a game-changer. However, organisations must ensure they have the right infrastructure, expertise and regulatory framework in place before implementation. Indicators or processes to look for the value add could be multiple international subsidiaries, where intercompany transactions are frequent or significant foreign exchange exposure, requiring centralised risk management. Multiple bank relationships in the same region or even country and trapped cash are also driving factors.
The centralisation of processes with an IHB and a dedicated team enable faster responses to changing environments, generate value for the business, and ensure alignment with global corporate guidelines while enhancing overall efficiency. Companies can take their IHB to the next level by expanding treasury solutions, automating processes for greater efficiency, and ensuring agility in response to geopolitical changes, regulations and economic uncertainty.
