Treasury teams don't just make payments, they add tangible value to business
Meet Sarah, Treasurer @ Innovate
Innovate is a fictional, yet rapidly growing company and they have recently secured a significant round of funding, leaving them with a substantial cash balance. While this is great news, Sarah's primary concern is safeguarding these funds while maximizing their potential return. She's wary of the risks associated with unsecured deposits and wants a solution that offers both security and liquidity
The Challenge:
Innovate Inc. needs to maintain a certain level of liquidity for operational expenses and potential acquisitions. However, simply parking the cash in a traditional deposit account offers minimal returns and exposes the company to counterparty risk. Sarah's mandate is to find a solution that:
Protects the principal: Ensures the funds are safe and insulated from bank failures or market volatility.
Offers competitive returns: Generates a reasonable return on the cash without compromising security.
Maintains liquidity: Allows access to funds when needed for business operations.
Provides transparency and control: Offers clear visibility into the investment strategy and the underlying assets.
Protects the principal: Ensures the funds are safe and insulated from bank failures or market volatility.
Offers competitive returns: Generates a reasonable return on the cash without compromising security.
Maintains liquidity: Allows access to funds when needed for business operations.
Provides transparency and control: Offers clear visibility into the investment strategy and the underlying assets.
The Outcome
By using secured deposit service, Sarah has achieved her objectives:
Principal Protection: Innovate's cash is safe and protected by the ring-fenced collateral structure.
Competitive Returns: The company earns a significantly better return on their cash than they would with traditional deposit accounts.
Liquidity: They maintain access to their funds when needed for business operations.
Transparency and Control: Sarah has full visibility into the investment strategy and the underlying assets.
By securing the deposit and lowering the overall risk, Sarah was able to increase her counterparty and duration exposure limits to place a greater balance with more choices of tenor than was possible with unsecured cash deposits placed with the same institution.
Principal Protection: Innovate's cash is safe and protected by the ring-fenced collateral structure.
Competitive Returns: The company earns a significantly better return on their cash than they would with traditional deposit accounts.
Liquidity: They maintain access to their funds when needed for business operations.
Transparency and Control: Sarah has full visibility into the investment strategy and the underlying assets.
By securing the deposit and lowering the overall risk, Sarah was able to increase her counterparty and duration exposure limits to place a greater balance with more choices of tenor than was possible with unsecured cash deposits placed with the same institution.
How it works
1. Ring-Fenced Collateral
2. Wholesale Repo Market Access
3. Competitive Returns
4. Liquidity and Access
5. Transparency and Control
2. Wholesale Repo Market Access
3. Competitive Returns
4. Liquidity and Access
5. Transparency and Control
In Summary
For Innovate, the secured deposit service provides a robust and efficient solution for managing cash, allowing Innovate to focus on their core business of innovation and growth.
Innovate is a fictional, yet rapidly growing company and they have recently secured a significant round of funding, leaving them with a substantial cash balance..
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