The risk of keeping cash in too few banks
If a bank runs into trouble, whatever the company has deposited there stops being available. That's why risk teams set counterparty limits: how much can be held at each institution or financial group.
Setting the limits is the easy part. Checking them every day is harder. It usually happens in a spreadsheet, with balances someone copies from the bank, and when an auditor asks whether the check was done every day, the answer depends on whoever did it remembering.
FLIQO takes the balances it already has for each account and investment, compares them with the limits in force and keeps a record of every check.
Limits the way your risk team sets them
Risk decides the limits; FLIQO checks them. A limit can be a fixed amount or a percentage. It might say, for instance, that no more than a fifth of total funds sit with a single bank, in which case the cap adjusts on its own when the total changes. It can also be set as a share of the group's overall limit.
Each limit is checked at one of three levels:
- Company: what one company holds at that institution.
- Group: what all the group's companies hold there together.
- Treasury perimeter: what's held by the companies whose cash the parent manages, even when that set doesn't match the legal structure.
A bank and its asset manager can be treated as a single exposure, because if the financial group gets into trouble, both do.
Each limit states which currencies count against it: everything held at that institution, converted into the limit's currency, or only what's held in that currency. If a limit leaves balances out, the screen flags it.
Each month's limits are loaded from the same file the risk team already sends.
What counts, and how close you are
Exposure comes from account balances at each bank and from investments placed with each issuer. Every limit shows its utilization with a traffic light, and the ones over the limit come first. Opening an institution shows which accounts and investments make it up, the exchange rate used for each, and any temporary excesses in force.
FLIQO also measures how concentrated treasury cash is: whether it's spread across many institutions or depends on a few.
Temporary excesses, with two signatures
Sometimes a transaction needs to go over a limit for a few days. The excess is requested with the extra amount, the dates and the reason, and it only takes effect once a second person with risk approval rights signs it off. Whoever asks for it can't approve it.
When the agreed date passes, the excess closes on its own. If more time is needed, a new one is requested.
A daily check that gets signed
A person does the check every day. When they run it, FLIQO saves the state of every limit at that moment and asks whoever signs to state what they reviewed and what they did about any excesses.
If nobody has run the check by the cut-off time your company sets, the system records the day's state, but unsigned. In the history, those days show up as automatic records, kept apart from signed checks, which is what an auditor looks at. Nothing a person signed is ever overwritten: if the check is run twice in one day, both versions are kept.
The history shows which days were checked, who signed, how many limits were in the red and what was declared.
Ask Aria
You can ask Aria which banks are over their limit, how much room is left with an institution, how much each currency weighs in the exposure to a bank, where treasury cash is concentrated, or whether today's check has been signed. She answers from the same data the screen shows and tells you what still needs checking before the cut-off.
Aria helps with the review, but she doesn't sign. Reviewing, approving excesses and signing the check always stay with a person.
Frequently asked questions
Where do the balances come from?
From the accounts and investments the company already has in FLIQO, using their latest balance. Nothing has to be keyed in separately for the check.
Does it work for a group with several companies?
Yes. Limits can be checked by company, by group, or by a treasury perimeter that brings together only the companies whose cash is managed jointly.
Does it handle balances in several currencies?
Yes. Each limit states which currencies count and converts them into its own currency. If it leaves any balance out, the screen shows it.
Who can approve a temporary excess?
Someone with the risk permission to do so, and never the same person who asked for it.
What happens if nobody does the check one day?
The system saves that day's state of the limits without a signature, and the history shows it as an automatic record.
Does FLIQO replace the risk team's decisions?
No. Risk still sets the policies, the limits and the approvals. FLIQO does the monitoring and keeps the evidence.