Reference · 130 terms · 12 topics

Treasury Technology Glossary

The words that come up in every bank meeting, vendor demo and project plan, explained the way a practitioner would explain them. Where there is an article or a tool that goes deeper, the term links to it.

Bank Connectivity13 termsHow files and messages physically travel between your company and your banks.

Bank connectivity#: The channels a company uses to send payment instructions to its banks and receive statements back. The usual options are SWIFT, EBICS, host to host, bank APIs and bank portals, and most groups run a mix.; Read: Bank connectivity: what are the options? →Tool: Bank Connection Mapper →
SWIFTSociety for Worldwide Interbank Financial Telecommunication#: The cooperative network banks use to exchange financial messages securely. Corporates can join it too, which lets them talk to many banks through one connection.; Read: EBICS vs SWIFT →
SWIFT FIN#: SWIFT's message service for individual MT messages, such as MT101 payment requests or MT940 statements. Each message is validated by the network before delivery.
SWIFT FileAct#: SWIFT's file transfer service. It carries whole files, typically ISO 20022 batches such as pain.001 or camt.053, rather than single messages.
SCOREStandardised Corporate Environment#: A SWIFT model that lets a corporate exchange messages with every participating bank through a single setup. The alternative is a separate closed user group per bank.
MA-CUGMember Administered Closed User Group#: A SWIFT setup where one bank admits a corporate into its own group. Simple for one bank, but you need a separate one for every bank you work with.
Service bureau#: A third party that runs your SWIFT connection for you, so you do not operate the infrastructure in house. Common for mid sized corporates.
EBICSElectronic Banking Internet Communication Standard#: A file transfer standard between companies and banks, widely used in Germany, France, Austria and Switzerland. Files are signed electronically, either inside EBICS or through a separate authorisation step.; Read: EBICS vs SWIFT →
Host to hostH2H#: A direct file connection between your company and one bank, usually over SFTP. Strong for high volumes, but every bank is its own project with its own formats and testing.; Read: Host to host: what it actually is →
SFTPSSH File Transfer Protocol#: An encrypted way to move files between two servers. It is the transport behind most host to host connections, and on its own it says nothing about formats or approvals.; Read: Your TMS supports every bank channel through its SFTP →
Bank APIApplication Programming Interface#: A real time interface where your system asks the bank a question (a balance, a payment status) and gets an answer in seconds. Great for visibility, less standardised than files.; Read: Bank APIs for treasury →Read: Treasury API cheat sheet →
Open banking#: Rules, such as PSD2 in the EU, that require banks to give licensed third parties API access to payment accounts. Mostly built for retail and SME use cases, not corporate treasury.
Electronic banking portal#: The bank's own web front end. Fine for a handful of accounts, painful at scale, because every bank has a different login, layout and export.

Payments & Payment Messages17 termsThe formats and references that carry a payment from your system to the beneficiary.

ISO 20022#: The global standard for financial messages, written in XML. Message families include pain (customer to bank), pacs (bank to bank) and camt (cash management and reporting).; Read: TMS, EBICS, API, ISO 20022: four layers →
pain.001Customer Credit Transfer Initiation#: The ISO 20022 file you send to your bank to request payments. One file can hold many payments, each with amount, beneficiary, references and execution date.; Read: MT101 to pain.001 →Tool: Payment Message Explorer →Tool: Payment File Generator →
pain.002Payment Status Report#: The bank's answer to your pain.001: accepted, rejected or pending, at file or payment level, with reason codes for rejections.; Tool: Payment Status Journey →
pain.008Customer Direct Debit Initiation#: The ISO 20022 file used to collect money from customers by direct debit, for example SEPA Direct Debit.
pacs.008#: The ISO 20022 message banks use between themselves to move a customer payment. It is replacing MT103 on SWIFT's cross border payments.
MT101Request for Transfer#: The older SWIFT format for corporate payment requests. Many banks still accept it in the corporate to bank space, so check your own bank's timeline rather than assuming a single end date.; Read: MT101 to pain.001 →
MT103#: The SWIFT message for a single customer payment between banks. On cross border SWIFT traffic it is being replaced by pacs.008.
CBPR+Cross Border Payments and Reporting Plus#: SWIFT's usage guidelines for ISO 20022 messages on cross border payments. They define which fields are mandatory and how they must be filled.
Structured address#: A postal address split into separate fields (street, building, postcode, town, country) instead of free text lines. SWIFT is phasing out fully unstructured addresses on cross border payments, so check the current date with your bank.; Tool: Field Mapping Lab →
End to end IDEndToEndId#: Your own reference for a payment. It travels unchanged through the chain and comes back in status reports and statements, which makes it the key for reconciliation.
UETRUnique End to End Transaction Reference#: A unique identifier attached to a cross border payment so every bank in the chain, and you, can track it. It is what SWIFT gpi tracking runs on.
SWIFT gpi#: SWIFT's service for tracking cross border payments end to end, including fees deducted and when the beneficiary was credited.
SEPA InstantSCT Inst#: Euro payments that arrive within ten seconds, around the clock. Under the EU Instant Payments Regulation, euro area payment providers must offer them at no higher price than regular transfers.
Verification of PayeeVoP#: A check that the beneficiary name matches the IBAN before a euro payment is sent. Mandatory for euro area payment providers since October 2025. Bulk payment files can opt out.
Straight through processingSTP#: A payment or transaction that goes from start to finish without anyone touching it. The STP rate is the share of items that never needed a human.
Payment factory#: A central function, often inside the treasury centre, that produces and sends payments for the whole group through one set of formats, controls and bank connections.
POBO / COBOPayments / Collections on behalf of#: A model where one group entity pays suppliers or collects from customers on behalf of other entities. It cuts bank accounts, but needs clean intercompany accounting behind it.; Read: In house banking guide →

Bank Statements & Reporting11 termsWhat the bank sends back, and the fields you reconcile with.

camt.053Bank to Customer Statement#: The ISO 20022 end of day statement: opening and closing balances plus every booked transaction with its details.; Read: MT940 to camt.053 migration guide →Tool: camt.053 Transaction Processor →
camt.052Bank to Customer Account Report#: The ISO 20022 intraday report. It shows movements during the day, before the final statement.
camt.054Debit Credit Notification#: A notification of individual debits or credits. Often used to give the detail behind a batch booking that appears as one line on the statement.
MT940 / MT942#: The SWIFT formats for the end of day statement (MT940) and intraday report (MT942). Still common, but with limited space for references and remittance detail.; Read: MT940 to camt.053 migration guide →
BAI2#: The statement and reporting format used by US banks. If you bank in the United States, you will meet it.
Bank transaction codeBTC#: A code that says what kind of transaction a statement line is, for example an incoming SEPA transfer or a card fee. ISO 20022 uses a domain, family and subfamily structure.; Tool: Bank Statement Data Lab →
Batch booking#: The bank books a whole payment file as one debit on your statement. Convenient for the bank, harder to reconcile unless you also receive the detail.
Booking date vs value date#: The booking date is when the bank recorded the entry. The value date is when it starts or stops earning interest. They are not always the same day.
Remittance information#: The text or structured reference that tells the receiver what a payment is for. In SEPA payments, unstructured remittance is limited to 140 characters.
Creditor referenceRF reference, ISO 11649#: A structured payment reference with a check digit, so the receiver can match a payment to an invoice automatically.
camt.086Bank Services Billing#: An ISO 20022 statement of bank fees, broken down by service. Useful for fee audits, if your banks actually send it.; Tool: camt.053 Fee Analyzer →

Treasury Systems & Integration10 termsThe systems treasury runs on, and how data gets between them.

TMSTreasury Management System#: Software for cash positioning, forecasting, payments, deals, risk and bank connectivity. What it actually does well depends heavily on how it is implemented.; Read: TMS reality check →Tool: TMS Vendor Checklist →
ERPEnterprise Resource Planning#: The company's core accounting and operations system, such as SAP, Oracle or Microsoft Dynamics. Treasury usually depends on it for invoices, payments and the general ledger.
In house bankIHB#: A structure where the treasury centre acts as the bank for group entities: internal accounts, internal interest and payments on their behalf.; Read: In house banking guide →
Bank account managementBAM, eBAM#: Keeping a single, current record of every bank account, its signatories and its status, and handling openings, changes and closures. eBAM does the bank side electronically.; Read: Low cost solution for bank mandates →
Master data#: The reference data everything else depends on: bank accounts, counterparties, entities, currencies, signatories. Most integration errors trace back to it.
Field mapping#: Defining which field in one system or format fills which field in another, for example ERP vendor data into a pain.001. Where most format projects succeed or fail.; Tool: Field Mapping Lab →Tool: Integration Mapper →
MiddlewareiPaaS#: Software that sits between systems and moves, transforms and routes data. iPaaS is the cloud version.
File based integration#: Systems exchange data by dropping files in agreed folders on a schedule. Simple and robust, but never real time.
SaaSSoftware as a Service#: Software the vendor hosts and updates for you, accessed through a browser. Most new TMS implementations are SaaS.
Monolithic system#: One large system that tries to do everything. Easier to buy, harder to change when one part no longer fits.; Read: Why treasury tech is still monolithic →

Cash, Liquidity & Pooling9 termsKnowing where the cash is, and moving it to where it is needed.

Cash visibility#: Knowing the balance on every account, in every entity, at a given time. Sounds basic. Rarely is.
Cash positioning#: Working out today's expected closing position per account, so you can fund shortfalls and invest surpluses before the cut off.
Cash flow forecasting#: Projecting future inflows and outflows. The direct method builds it from receipts and payments, the indirect method from the balance sheet and P&L.; Read: Build a cash flow forecasting tool on a budget →
Zero balancingZBA, physical cash pooling#: Balances on participant accounts are physically swept to a header account every day, leaving them at zero. Creates intercompany loans you need to track.; Tool: Cash Pool Simulator →
Notional pooling#: Balances stay where they are, but the bank calculates interest as if they were combined. No physical movement, more regulatory and bank conditions.; Read: Multi currency notional pooling guide →Tool: MCNP Business Case Calculator →
Sweeping#: Automatic transfers between accounts based on rules, such as moving everything above a target balance to the header account.
Virtual accountsVAM#: Sub accounts under one real account, often one per customer or entity. Incoming payments reconcile themselves because each payer gets its own number.
Trapped cash#: Cash you have but cannot use where you need it, because of regulation, tax, minimum balances or operational limits.; Read: Trapped cash and true available liquidity →
Multilateral netting#: Group entities offset what they owe each other and settle only the net amount, usually once a month through a netting centre.; Tool: Intercompany FX Netting →

FX & Risk11 termsCurrency exposure, and the instruments and rules used to manage it.

Functional currency#: The currency of the main economic environment an entity operates in. Anything in another currency is foreign currency for that entity, and creates exposure.; Read: Intercompany FX hedging →
Transaction exposure#: Risk on actual receivables, payables and cash flows in a foreign currency. This is the exposure most treasury hedging targets.
Translation exposure#: Risk that converting a foreign subsidiary's results into the group currency changes the reported numbers, even if no cash moves.
Revaluation#: Restating foreign currency balances at the current rate at period end. The difference goes to the P&L, which is where unhedged exposure becomes visible.
FX forward#: An agreement to exchange two currencies at a fixed rate on a future date. The standard tool for hedging known exposures.
FX swap#: A spot exchange combined with a forward in the opposite direction. Used to move liquidity between currencies or roll hedges.
NDFNon Deliverable Forward#: A forward on a currency that cannot be freely traded offshore. Only the difference is settled, in a convertible currency such as USD.
Hedge ratio#: The share of an exposure you choose to hedge, for example 80%. Usually set in the hedging policy, sometimes by tenor bucket.
Natural hedge#: Exposures that offset each other without any trade, such as a USD receivable in one entity and a USD payable in another.; Tool: Intercompany FX Netting →
Internal forwardBack to back#: A forward between the treasury centre and a group entity. The centre then hedges the net of all internal deals with a bank.
Hedge accounting#: Accounting rules, under IFRS 9 or US GAAP, that let the hedge and the hedged item hit the P&L in the same period. Requires documentation and effectiveness testing.

Reconciliation & Data9 termsMatching what the bank says with what your books say.

Bank reconciliation#: Matching statement lines with ledger entries and explaining every difference. The process that shows whether your data is any good.; Read: Automate bank reconciliation →Tool: Reconciliation Readiness Check →
Matching rules#: The logic that pairs items: one to one, one to many or many to many, on amount, date and reference, with tolerances.; Tool: Reconciliation Rules Playground →
Auto match rate#: The share of items matched without human help. Useful, but a high rate with wrong matches is worse than a lower rate with correct ones.
Tolerance#: How far two items may differ and still match, for example a small amount for bank charges or a few days on dates.
Exception#: An item the rules could not match. Exception handling, meaning who looks at it, by when, and what they do, is most of the real work.
Cash application#: Allocating incoming customer payments to open invoices. Poor remittance information is the usual reason it stays manual.
Suspense account#: A temporary account for items nobody has identified yet. If it keeps growing, reconciliation is not really happening.
Intercompany reconciliation#: Checking that what one entity says another owes matches what the other says it owes. It must balance before you hedge or net.; Tool: Intercompany FX Netting →
Data quality#: Whether data is complete, accurate, consistent and on time. In treasury, most automation failures are data quality failures in disguise.; Read: Build a treasury data repository without an ERP →

Automation & Workflows7 termsTaking repetitive work out of human hands, and keeping control while you do it.

RPARobotic Process Automation#: Software robots that click through screens and copy data the way a person would. Quick to build, brittle when a screen changes.; Read: Agentic AI vs RPA in treasury →
Workflow automation#: Automating a sequence of steps across systems, such as fetch a file, transform it, send it for approval, post it. Power Automate is a common tool.; Tool: Automation Workflow Builder →
Low code / no code#: Tools that let people build automations and apps with visual blocks instead of programming. They lower the barrier, not the need for process discipline.; Read: Build a treasury bot without coding →
Rules engine#: Logic that applies explicit if this then that rules. Predictable and auditable, which is why many treasury processes should use rules rather than AI.; Tool: Rules, Automation or AI? →
Scheduled job#: A task that runs automatically at a set time, such as fetching statements at 07:00. Someone still needs to notice when it fails.
Automation maturity#: How far a treasury has moved from manual work to automated, integrated processes, usually described in stages.; Read: The automation maturity model →Read: Automation maturity assessment →
Automation business case#: The numbers behind an automation decision: hours saved, errors avoided, cost to build and run, payback period.; Tool: Automation Business Case Builder →Tool: Treasury Automation ROI Calculator →

Security, Access & Controls11 termsWho can do what, who approves it, and how you prove it afterwards.

Segregation of dutiesSoD#: No single person can complete a sensitive process alone, for example creating a payment and approving it.; Tool: Segregation of Duties Diagram →
Four eyes principle#: Every critical action needs a second person to check and approve it.
Approval matrix#: The rules for who can approve what, by amount, entity, payment type or bank.; Tool: Access & Approval Matrix →Read: Payment approval automation →
Bank mandate#: The legal document that tells a bank who may operate an account and within which limits. Keeping mandates current across banks is a classic treasury headache.; Read: Low cost solution for bank mandates →
3SKey#: A SWIFT personal digital identity that signatories can use to sign payment files across multiple banks with one token.
Digital signature#: A cryptographic signature proving who approved a file and that it was not changed afterwards. Underpins EBICS and many host to host setups.
PGP encryption#: A common way to encrypt and sign files before they travel to a bank, so only the bank can read them.
MFAMulti factor authentication#: Logging in with something you know plus something you have, such as an app or token. A baseline for any system that can move money.
Business email compromiseBEC#: Fraud where someone impersonates a supplier or executive by email to get a payment sent or bank details changed. Controls on master data changes are the main defence.
Audit trail#: A record of who did what and when, which cannot be edited afterwards. Auditors will ask for it.
SOC 1 / SOC 2ISAE 3402#: Independent reports on a service provider's controls. Ask your TMS or SaaS vendor for them before you sign.

Implementation & Testing9 termsGetting a system or bank connection live without surprises.

RFPRequest for Proposal#: The structured document you send vendors to compare their offers against your requirements.; Tool: TMS Vendor Checklist →Tool: Connectivity Requirements Builder →
UATUser Acceptance Testing#: Testing by the people who will use the system, on realistic scenarios, before go live. The last chance to find out that the happy path is the only path that works.; Tool: Treasury UAT Scenario Builder →
Happy path#: The scenario where everything works as designed. Real testing is mostly about the other paths: rejections, duplicates, holidays, cut offs.
Test environment#: A copy of a system or bank channel for testing, separate from production. Banks often have test environments that behave differently from the real thing.
Bank onboarding#: The bank side of a new connection: KYC, contracts, keys and certificates, format certification and test files.
Parallel run#: Running the old and new process side by side for a period and comparing results before switching off the old one.
Cutover#: The planned moment you switch from the old system or channel to the new one, with a rollback plan if it fails.
Hypercare#: The weeks after go live when the project team stays on call to fix issues fast.
Regression testing#: Retesting things that already worked after a change or upgrade, to check nothing broke.

AI in Treasury13 termsThe AI vocabulary you need to judge what a tool actually does.

LLMLarge Language Model#: An AI model trained on huge amounts of text that predicts the next words. ChatGPT, Claude, Gemini and Copilot are built on them.; Read: The 3 ways AI works in treasury →
Generative AI#: AI that produces new content, such as text, code or images, rather than only classifying or predicting numbers.
Machine learning#: Models that learn patterns from historical data to predict or classify, for example forecasting cash or flagging unusual payments.; Read: Machine learning in Excel →
Prompt#: The instruction you give an AI model. Clear task, context, constraints and output format matter more than clever wording.; Tool: Treasury Prompt Builder →
Context window#: How much text a model can take into account at once, measured in tokens. Anything outside it, the model simply does not see.; Tool: Context Inventory Checklist →
Token (AI)#: The unit of text a model reads and writes, roughly three quarters of an English word. Usage and pricing are counted in tokens.
RAGRetrieval Augmented Generation#: The model first searches your own documents, then answers using what it found. How you get answers grounded in your policies instead of the internet.; Read: Private treasury GPT with RAG →
Hallucination#: A confident answer that is wrong or invented. The reason every AI output in treasury needs a check before anyone acts on it.; Tool: AI Output Review Lab →
AI agentAgentic AI#: An AI system that is given a goal and tools, then plans and executes the steps itself. Flexible, and able to fail quietly.; Read: Agentic AI in corporate treasury →Read: Agentic AI vs RPA →
Copilot#: An AI assistant built into the tools you already use, such as Microsoft 365 Copilot in Excel, Outlook and Teams.; Read: Build a treasury AI copilot in Microsoft 365 →
Public vs private LLM#: A public model runs on the vendor's shared service. A private one runs in your own environment or a dedicated instance, with more control over data.; Read: Public vs private LLM in treasury →
Human in the loop#: A person reviews or approves the AI's output before it takes effect. In treasury, this is where accountability sits.
AI use case#: A specific problem AI is meant to solve, with the data, success measure and verification defined up front.; Tool: AI Use Case Canvas →

Go deeper: AI Glossary for Treasury: 50+ AI concepts in more depth →

Digital Money & New Rails10 termsTokens, ledgers and the settlement layer underneath them.

Tokenised deposit#: A normal bank deposit recorded on a blockchain style ledger. Same bank, same liability, same protections, but it can move 24/7 and carry conditions.; Read: Tokenised deposits explained →
Stablecoin#: A token issued, usually by a non bank, that aims to hold a fixed value against a currency, backed by a pool of reserve assets. A claim on that pool, not on a bank.; Read: Tokenised deposits explained →
CBDCCentral Bank Digital Currency#: Digital money issued directly by a central bank. Retail CBDC, such as the digital euro project, is for everyone. Wholesale CBDC is for settlement between banks.
Central bank money#: Money that is a claim on the central bank: cash, and the reserves banks hold at the central bank. Banks settle with each other in it.
RTGSReal Time Gross Settlement#: The central bank system where large payments between banks settle one by one in central bank money, such as T2 in the euro area or CHAPS in the UK.
DLTDistributed Ledger Technology#: A shared ledger kept in sync across several participants. Blockchain is one type.
Smart contract#: Code on a ledger that executes automatically when conditions are met, for example releasing a payment when goods are confirmed received.
Atomic settlement#: Both legs of a transaction settle together or not at all, so nobody is left having paid without receiving.
Programmable payment#: A payment with logic attached: it waits for a condition, splits automatically or executes at a set moment.
Project Agorá#: A BIS led project with central banks and commercial banks testing tokenised commercial bank deposits settled in tokenised central bank money, across currencies.