Companies face growing challenges in liquidity management in an increasingly unstable and interconnected global economy. For example, the fragmentation of bank balances, exchange rate volatility, and the need for real-time visibility on financial flows require a thorough reassessment of corporate treasury strategies.
For treasury managers, the priority is no longer merely cost optimisation, but ensuring operational resilience, rapid decision-making, and centralised cash control. Therefore, adapting quickly and maximising internal liquidity has become a crucial competitive advantage.
In this article, we explore the treasury needs of multinational companies and outline advanced approaches and tools, such as cash pooling and multi-currency solutions, that transform liquidity management into a strategic lever for growth and financial sustainability.
CORPORATE TREASURY IN A CHANGING LANDSCAPE
European companies currently operate in a macroeconomic environment that’s undergoing instability and profound transformation. As such, it requires a reassessment of financial management strategies.
According to a study conducted by EACT (The European Association of Corporate Treasurers), treasurers from major European corporations are identifying cash flow visibility, long-term refinancing, and working capital efficiency as emerging priorities.
Geopolitical tensions, high interest rate volatility, and rising financial risks are structurally changing how companies approach treasury. Similarly, the drive towards digitalisation and process automation has become essential to ensure operational resilience, responsiveness, and error reduction.
The key findings from the research include:
- Long-term refinancing remains a priority to ensure stability in a context of high credit costs and selective capital access.
- Increasingly detailed and real-time cash forecasting is critical for navigating crisis scenarios or sudden financial stress.
- Capital structure is routinely reassessed to balance debt and equity, in line with long-term financial sustainability and growth.
A notable aspect is the growing importance of real-time data for decision-makers. According to EACT, by 2025, immediate access to updated liquidity information will be among the top priorities for treasury managers. As a result, dynamic reporting, interactive dashboards, and instant cash visibility are now critical for decision makers.
As highlighted by François Masquelier, Chair of EACT, “The challenge for treasurers is not so much the individual changes, but managing their simultaneity and continuity in an evolving economic, regulatory and technological landscape.”
The maturity of today’s digital solutions lays a solid foundation for improving liquidity management, combating financial fraud, and integrating increasingly advanced treasury systems. Achieving full mastery of advanced technologies requires strategic vision and banking partners capable of supporting companies throughout this transformation.
CORPORATE TREASURY: EVOLVING NEEDS AND STRATEGIC PRIORITIES FOR TREASURY MANAGERS
Treasury managers now operate in a complex environment, facing challenges that range from working capital management to financial risk mitigation and process automation. Multinational companies, in particular, are experiencing increasingly complex needs, including:
- Rebalancing cash flows across group entities by quickly offsetting liquidity deficits and surpluses.
- Strengthening financial resilience by optimising internal liquidity use and reducing financing costs.
- Centralising group-level treasury to reduce interest expenses and banking fees.
- Accessing a consolidated and dynamic view of the cash position to improve forecasting and planning capabilities.
To address these needs, companies are increasingly relying on advanced Liquidity and Cash Management solutions that strengthen financial resilience and operational competitiveness. Tools such as cash pooling, particularly in its most advanced forms, are becoming key levers to transform liquidity management into a tangible strategic advantage.
CASH POOLING: CENTRALISING LIQUIDITY TO STRENGTHEN FINANCIAL GOVERNANCE
Cash pooling is one of the most widely adopted strategies for streamlining treasury management. Companies can simplify financial flows between subsidiaries, eliminate operational inefficiencies, and optimize working capital by centralising liquidity. Its implementation allows businesses to respond swiftly to continuously changing market scenarios by enhancing group financial governance.
This approach is effective for complex corporate structures with multiple operating units generating uncoordinated cash flows. Cash pooling turns this fragmentation into an opportunity, centralising financial resources and decision-making.
In the traditional model, cash pooling involves the physical transfer of liquidity from secondary accounts (held by subsidiaries) to a central treasury account managed by the holding company. This operation occurs automatically, either at the end of the day or on a scheduled basis, enabling:
- Temporary cash shortfalls in subsidiaries are covered using surplus funds from other group entities.
- Reliance on overdrafts or external borrowing is reduced, lowering financing costs and leverage.
- Centralised surpluses can be strategically invested to generate higher returns.
Cash pooling is particularly suitable when accounts are denominated in the same currency and subject to the same jurisdiction.
According to PwC’s research, “Pooling solutions today: a new way of looking at liquidity management”, around 50% of Italian companies surveyed have already adopted cash pooling solutions. This research confirms the growing confidence in well-established and increasingly advanced tools. The trend is supported by the availability of integrated, flexible market offerings designed to meet the specific needs of companies across all sectors and sizes.
However, in the presence of accounts in different currencies, traditional cash pooling may prove inefficient due to conversion costs and regulatory barriers.
Moreover, the spread of cross-border payments and the expansion of international trade are increasing the need to operate in multiple currencies, including less common exotic currencies, on global FX markets. For instance, the adoption of advanced multi-currency cash pooling and centralised liquidity management solutions becomes essential to ensure operational efficiency and mitigate exchange rate risks.
CROSS-CURRENCY NOTIONAL CASH POOLING: THE MULTI-CURRENCY EVOLUTION
This is where Cross-Currency Notional Cash Pooling comes into play. It’s a more advanced solution that enables virtual offsetting of balances in different currencies, without physically moving funds. This system provides a unified, constantly updated view of overall cash positions, which improve treasury decision-making capabilities.
The main advantages of multi-currency Notional Pooling include:
- Significant reduction in currency conversion costs, thanks to pre-established buffers of available currencies calibrated to treasury cycle averages and peaks.
- Instant visibility of aggregated liquidity and improved forward-looking management of net surpluses, enhancing financial returns on long positions.
- Global optimization of interest income and expenses, reducing the need for local financing and enabling better “Notional Pool” conditions through a more efficient capital structure, even from the bank’s perspective.
- Improved currency risk management, supported by a platform that allows actual centralisation of forex positions and more agile implementation of corporate FX policies.
Thanks to technological progress and increasing regulatory openness, multi-currency Notional Pooling now represents a strategic lever available to less structured groups aiming to compete on a global scale. Companies adopting Cross-Currency Notional Cash Pooling can establish a solid financial base to plan investments, support growth, and respond promptly to business uncertainties.
In recent years, several factors have created the adoption of multi-currency pooling solutions:
- Regulatory clarity: Recent regulations have removed major barriers that previously hindered product development and implementation.
- Challenging macroeconomic conditions: Rising interest rates have pushed companies towards more efficient liquidity management, including advanced tools like Cross-Currency Notional Pooling.
- Growing internationalisation: To remain competitive, companies must operate in global markets and equip themselves with suitable tools to manage currencies in their reference countries.
- Technological innovation: Treasury process automation simplifies the integration of complex, multi-level solutions like Cross-Currency Notional Pooling into Treasury Management Systems (TMS).
- Expanded banking offering: The availability of advanced platforms now enables even mid-sized companies operating globally to access services once reserved for large multinationals.
CASE STUDY: HOW AN INDUSTRIAL GROUP TURNED TREASURY INTO A STRATEGIC ASSET
To understand how advanced liquidity management solutions can address the challenges faced by international businesses, let’s examine the case of a major industrial group that transformed its treasury into a strategic asset through the adoption of Intesa Sanpaolo’s Multi Currency Optimizer (MCO).
A prominent industrial player operating internationally in the engineering sector, with a strong focus on technological innovation and sustainability. The group operates in a complex global context and is structured around numerous operational entities.
THE CHALLENGE
The group’s global reach and complex structure resulted in highly fragmented liquidity management, with accounts in multiple currencies held at different banks across misaligned time zones.
The main operational issues included:
- High conversion costs due to frequent transfers between different currency accounts.
- Difficulty in financial planning owing to the absence of integrated consolidation tools.
- Lack of a unified, real-time view of balances, hindering effective cash position monitoring.
- Suboptimal returns due to the decentralized and uncoordinated management of surplus liquidity.
The group aimed to centralise treasury management, improve liquidity profitability, and reduce reliance on external financing sources.
THE SOLUTION
To meet these needs, the group adopted Intesa Sanpaolo’s Multi Currency Optimizer (MCO), an advanced Cross-Currency Notional Cash Pooling solution designed to:
- Centrally and virtually manage balances in multiple currencies.
- Offer a consolidated, real-time view of group financial resources.
- Optimise interest management and reduce forex and hedging costs.
- Enable balance offsetting without physically transferring funds.
The system was implemented to link operational entities’ accounts to the holding company’s central account, while maintaining legal and managerial autonomy. The solution also offered high configurability and full compliance with local regulations.
THE BENEFITS
The introduction of the Multi Currency Optimizer (MCO) delivered numerous operational and strategic benefits:
- Liquidity optimisation: Virtual balance offsetting significantly reduced the need for external financing;
- Improved interest management: Idle balances were pooled and strategically allocated to higher-yield accounts or short-term investments.
- Reduced conversion costs: The single multi-currency platform helped eliminate redundant FX operations and lower banking charges.
- Enhanced financial visibility: Access to consolidated and updated data boosted treasury’s decision-making capacity, enabling more agile, responsive management.
- Strategic liquidity reallocation: Surpluses were directed to reserves or short-term investments, while deficits were covered internally, which improves overall efficiency.
In conclusion, the solution enabled the group to turn the treasury into a value centre capable of supporting growth and strengthening global financial stability.
The ability to aggregate, monitor, and intelligently manage multi-currency liquidity through a single, integrated platform, such as Inbiz enabled the company to tackle today’s financial challenges with greater confidence and turn liquidity management into a lever for increasing global market competitiveness.