Treasury services for TCSPs: a potential new revenue stream

For many Trust and Corporate Service Providers (TCSPs), the core business is administration — entity formation, compliance, accounting and corporate governance. Treasury services may complement that work, but only where the firm’s permissions, client mandates, expertise and controls support the proposed activities.

The opportunity is to extend that existing work into a defined treasury service without losing sight of the regulatory perimeter.

What is a treasury-services function?

A treasury-services function within a TCSP can help clients manage cash, liquidity, payments and currency exposures. The exact scope matters: execution, advice, arranging products and receiving commissions may fall within different legal or regulatory perimeters.

There are three core pillars:

FX management

Foreign exchange is a regular part of many TCSP operations. Clients may hold multi-currency accounts, make payments in different currencies and carry FX exposure.

FX may be handled reactively when a payment becomes due, without an agreed approach to timing, benchmarking or reporting.

A treasury-services function can introduce more structure:

Planned FX management: Monitor exposures and execute conversions under an approved client mandate and policy, rather than only when a payment is due.
Rate benchmarking: Compare rates across banking partners and FX providers to ensure clients get competitive pricing.
Hedging strategies: Where the TCSP is permitted and appropriately experienced, help clients assess forward contracts or other hedging instruments. Hedging can reduce one risk while creating cost, liquidity and counterparty exposures.
Transparency and reporting: Provide clients with clear reporting on FX activity, rates achieved, and savings delivered.

Potential revenue can come from disclosed transaction margins or advisory fees, where permitted. The client should understand the service, risks, pricing and any conflict created by the TCSP’s remuneration.

Cash-management solutions

Some clients hold cash in current accounts for longer than their liquidity needs require. A structured review can identify balances that may be suitable for another permitted product.

A cash-management function looks across the client’s cash position:

Sweep arrangements: Move excess balances under agreed thresholds, authorities and liquidity rules.
Term deposit placement: Place client funds in term deposits across banking partners to maximise returns while maintaining liquidity requirements.
Cash pooling: For suitable related entities, assess whether an agreed physical or notional pool could improve liquidity. Multi-client pooling requires separate legal and regulatory analysis.
Liquidity planning: Work with clients to understand their cash flow needs and structure their holdings accordingly.

The potential value is better-informed placement and liquidity decisions. A TCSP may charge management fees, receive placement commissions or agree another transparent fee model where its permissions, client agreements and conflicts framework allow it.

Beyond FX and deposits, a treasury-services function may consider adjacent products where its permissions and competence allow:

Money market fund placements: Money market funds may offer daily liquidity but are investments, not bank deposits, and their value and liquidity are not guaranteed. Facilitating or advising on them may be regulated.
Structured deposits: These can have complex returns, restrictions and risks. A TCSP should not recommend or arrange them without the necessary authority, expertise and suitability process.
Loan and credit facility coordination: While TCSPs typically don’t lend directly, they can coordinate with banking partners to arrange credit facilities for clients — earning referral fees or arrangement commissions.
Payment optimisation: Analysing payment patterns to identify opportunities to reduce costs — batch processing, optimal timing, payment routing.

How treasury services may benefit clients

Potential client benefits include:

Better-informed cash and FX decisions: Agreed processes can support comparison of products, rates and costs.
Risk management: Approved hedging and diversified deposit placement may reduce particular exposures, but can introduce costs and other risks that must be assessed.
Transparency: Clear, regular reporting on cash positions, FX activity and returns can improve the information available to clients.
Convenience: Clients get a single point of contact for their banking and cash management needs, rather than having to manage it themselves across multiple banks.
Professional governance: A documented approach can strengthen decision-making and oversight, provided the service itself complies with applicable obligations.

Structuring treasury services as a revenue stream

Possible revenue models include:

Management fees: Charge a fixed or percentage-based fee for ongoing treasury management.
Transaction margins: Earn a disclosed spread on FX transactions where permitted by the client mandate and applicable rules.
Placement commissions: Receive disclosed commissions from banking partners or product providers where permitted and appropriately managed.
Performance fees: Share in an agreed uplift, subject to a clearly defined benchmark, fair calculation and robust conflict controls.
Advisory fees: Charge for specific treasury advisory engagements, such as developing a hedging strategy or cash management policy.

Transparency is essential but may not be sufficient on its own. Clients should understand how the TCSP is compensated, what service it provides, which risks they retain and whether the TCSP or another party is advising, arranging, executing or holding assets.

Establish the regulatory perimeter first

Consider, with specialist advice where needed:

the TCSP’s licence conditions and existing permissions;
client-money, safeguarding, trust and fiduciary duties;
payment-services, investment-business and deposit-taking rules;
authority to execute payments, FX, deposits or investments;
product governance, suitability or appropriateness requirements;
disclosure, consent, inducement and conflict-of-interest rules;
sanctions, anti-money-laundering and transaction-monitoring controls; and
tax, accounting, insurance and capital implications.

Document the conclusion, obtain any required regulatory approval and ensure contracts, policies, competence and oversight match the service before it is offered.

Why some offshore TCSPs may be well positioned

Some offshore TCSPs already have relevant client knowledge, operational infrastructure and banking relationships. That can help, but it does not by itself authorise a treasury service.

Multi-currency exposure: Cross-border structures may create demand for more deliberate FX management.
Cash balances: Some structures hold balances that justify a formal liquidity and placement process.
Multiple banking relationships: Accounts across banks and jurisdictions create a need for consolidated visibility and consistent controls.
Client relationships: Existing knowledge of client structures can help a TCSP understand liquidity needs, mandates and decision-makers.
Regulatory familiarity: Experience in a regulated environment provides a foundation, but the firm must still assess the permissions and controls required for each additional activity.

Conclusion

Treasury services can help a suitably authorised and equipped TCSP extend its client proposition and diversify revenue. The opportunity should be tested through a documented business case and regulatory-perimeter assessment, rather than treated as a natural extension of administration.

Flinq provides technology for FX workflows, cash optimisation and multi-bank connectivity. Technology supports the operating model; it does not replace the TCSP’s permissions, professional advice or controls.

This article provides general information, not legal, regulatory or investment advice. The permissions, duties and product requirements depend on the activities, client mandates and jurisdictions involved.