For most of the past decade, the central problem in corporate cash management was visibility. Cash sat in too many accounts, currencies and manual processes for treasury teams to know where the group's liquidity actually was.
The technology, the banking architecture and the discipline needed to solve that problem absorbed most of treasury's attention.
Most treasuries have now solved it. Multi-bank platforms, host-to-host bank connectivity, treasury management systems and reporting frameworks have closed much of the visibility gap. The result is a quieter but more interesting problem.
Why has deployment replaced visibility as the main question?
As of October 1, 2026, the ECB deposit facility rate is 2.50% and the Fed target range is 3.75% to 4.00% (ECB, Federal Reserve). With visibility established, the question changes.
It is no longer where the cash is. It is what the cash should be doing.
After roughly a decade of zero or negative ECB deposit rates (ECB key interest rates), idle cash carries a real opportunity cost again. A company holding USD 100 million of operating cash in non-yielding accounts is leaving meaningful annual return on the table.
Multiply that across regions, currencies and entities, and treasury inertia becomes one of the larger silent expenses in the finance function.
The cost of idle cash is no longer a rounding error. It is a line item.
The deployment question splits into three increasingly difficult questions:
- How much of the cash is genuinely operational? Most treasuries overestimate this. The cash required to run the business day to day is usually smaller than the cash that sits in operating accounts by default.
- How much is strategic? It is held to fund an acquisition, a capex program, a dividend or covenant headroom. It has a specific purpose and is not freely available, but it can still earn a return until it is needed.
- How much is residual? This is cash that is neither operational nor strategically committed. It is the part of the balance sheet that most clearly underperforms.
Worked example: segmenting USD 100 million
The table uses illustrative numbers for a hypothetical group with USD 100 million across its accounts. The balances and yields are invented to show the arithmetic. They are not client data, market rates or a forecast.
| Tier | Illustrative balance | Illustrative yield before | Illustrative yield after | Illustrative annual difference |
|---|---|---|---|---|
| Operational | USD 35 million | 0% | 1.0% | USD 350,000 |
| Strategic | USD 40 million | 0% | 3.0% | USD 1,200,000 |
| Residual | USD 25 million | 0% | 3.5% | USD 875,000 |
| Total | USD 100 million | 0% | Blended 2.4% | USD 2,425,000 |
The point is not the specific yields, which depend on rates and bank terms at the time. It is that segmentation turns one undifferentiated balance into decisions with a measurable value.
In practice, the operational tier often earns through earnings credits or interest on operating accounts, rather than through investment.
How should treasury architecture change?
Once the question moves from visibility to deployment, the treasury architecture has to follow. A few patterns appear consistently in the work.
Operational cash discipline
Operational cash thresholds, set at entity level and consolidated at group, become the most important policy tool. They define what is working capital and what is excess. Without them, the deployment conversation has no foundation.
Thresholds work best when they are tied to a rolling 13 week cash forecast, so they move with the business.
Sweeping and pooling
Notional pooling, target balancing and zero-balancing structures are not new, but they are newly relevant. Where rates are positive, the cost of cash trapped in low-yielding accounts makes the case for the structure on its own.
The right structure depends on the countries, banks and legal entities involved. Local tax and legal rules shape what is possible in each one.
Currency-aware allocation
Yield differs by currency. A treasury policy that ignores this leaves return on the table. A policy that chases it without an FX framework introduces risk.
The structure required is not difficult, but it has to be designed.
Time horizon segmentation
Operational cash, near-term commitments and longer-horizon balances tolerate different instruments. A single deployment policy across all of them is almost always suboptimal.
What the bank sees
From the bank side, corporate deposits are not all equal. Operational balances that support payments and collections are valued highly, because they are stable and come with transaction business.
Surplus balances that a client could move tomorrow are valued less, and banks price them accordingly. A client who never asks about yield on those balances often receives the standard rate.
Banks are not wrong to do this. Pricing follows behavior, and a client's behavior is visible to its bank.
Banks also see which clients have a deployment policy. A treasurer who can state the operational and strategic cash, and what the policy allows, gets proposals built for that structure.
A treasurer who cannot gets the standard product menu. That is why deployment policy is also a negotiating position: it tells each bank which balances are in play.
Where do treasuries get stuck?
The most common obstacle is not analytical. It is governance. The deployment question crosses treasury, finance, the CFO and, increasingly, the board.
Policy, mandate, counterparty risk and reporting need to be aligned before deployment can happen at scale.
In practice, governance stalls on three points: who may approve an investment, which counterparties are acceptable and how the board sees the results. Answering them in writing clears the way for the rest.
The second most common obstacle is banking. The instruments and structures available to a company depend on its banking counterparts and the relationships it has built. Banking strategy and cash deployment are now the same conversation.
What should a CFO check first?
Before any deployment decision, a short checklist shows whether the foundations are in place. Each item can be answered in a single working session.
- Is there a written operational cash threshold for each entity?
- Can treasury split group cash into operational, strategic and residual tiers today?
- Does the treasury policy name approved counterparties and limits for surplus cash?
- Do sweeps or pooling move surplus balances to where they can earn a return?
- Does each material currency have its own yield benchmark?
- Has each bank been asked, in writing, what it pays on surplus balances?
What should treasurers expect over the next twelve months?
We expect three things to continue shaping the cash management agenda through the next year:
- Rate environments in the US and Europe will remain materially above the zero-bound levels treasuries optimized around in the prior decade.
- CFO attention to working capital and capital efficiency will continue to intensify, particularly in PE-backed companies.
- Banks will compete more aggressively on deposit structures, yield and liquidity products. That creates both opportunity and asymmetry for companies that engage actively.
The companies that benefit most will treat cash management as a deployment problem with clear policy, counterparts and governance, not as a back-office discipline. Visibility was the precondition. Deployment is the work.
For an independent review of your account structure, pooling and idle balances, see our cash management advisory.
This insight reflects general analysis and observations from FIRMA Advisory's work in treasury, banking, and cross-border financial advisory. It does not constitute investment advice, financial advice, or a recommendation in respect of any specific security, transaction, or financial decision. For analysis specific to your organization, contact us at [email protected].