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Treasury Management: Front Office for the Implementers

Most businesses are now aware of the benefits of treasury management, but many are still not using it to its full potential. Treasury management can be divided into three distinct areas: front office, mid-office and back office.

Back-office treasury management is usually handled by a dedicated operations unit, or the finance department, and focuses on compliance and risk management. Front office treasury management, on the other hand, is handled by the treasury sales and trading teams and focuses on generating revenue and profits. In this post, we'll be looking at front-office treasury management and how it can help your business.

Broadly, front-office treasury management is all about generating revenue and profits for your business. It involves activities such as market-making, proprietary trading, and providing liquidity to clients. To be successful in front-office treasury management, you need a deep understanding of financial markets and an ability to take advantage of market opportunities quickly. You also need to be able to manage risk effectively.

Front office treasury management is responsible for a variety of crucial tasks within an organization. These tasks involve working with the business to identify exposures, providing market information and pricing advice, cash management, dealing (money markets, FX, interest rates, long-term funding), and deal entry into the treasury management system (TMS). Let's take a closer look at each of these functions.

Working with the Business to Identify Exposures: One of the key responsibilities of front-office treasury management is working with the business to identify exposures. This involves assessing the organization's risks and developing strategies to mitigate them. This may include hedging strategies, credit enhancement, and more. Proper identification of exposures is crucial in today's volatile business environment.

Providing Market Information and Pricing Advice: Another important function of front-office treasury management is providing market information and pricing advice to the organization. This involves keeping abreast of market developments and being able to provide accurate and up-to-date information to decision-makers within the company. It also requires being able to provide pricing advice on a variety of financial instruments.

Cash Management: Cash management is another key responsibility of front-office treasury management. This involves forecasting cash flow needs, managing liquidity, and optimizing the use of cash. Cash

management is a crucial function in any organization as it ensures that there are sufficient funds available to meet short-term obligations.

Dealing (Money Markets, FX, Interest Rates, Long-Term Funding): Dealing is another important function of front-office treasury management. This involves trading in money markets, foreign exchange (FX), interest rates, and long-term funding. Dealing helps organizations manage their risks by allowing them to take positions in financial instruments that will offset potential losses in other areas.

Deal Entry into the Treasury Management System (TMS): The final responsibility of front office treasury management is deal entry into the treasury management system (TMS). This involves entering all trades into the TMS in a timely and accurate manner. The TMS is a crucial tool for treasury managers as it allows them to track all positions and assess risk exposure on an ongoing basis.

In conclusion, front-office treasury managers play a vital role in ensuring that organizations run smoothly and efficiently. Front office treasury management is a complex but potentially highly lucrative activity for businesses. The rewards can be significant, including increased revenue and profits for your business.


If you think front-office treasury management could be beneficial for your business, reach out to us today at info@executepartners.com.

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