Bank Account Rationalization: Why Most Multinationals Have Twice as Many Accounts as They Need

July 29, 2026

Bank Account Rationalization Why Most Multinationals Have Twice as Many Accounts as They Need

Nobody ever decides to have too many bank accounts. It happens gradually, and then it is simply true. An acquisition brings forty accounts along with the business. A local subsidiary opens two more for a project that ended years ago. A banking relationship that no longer serves any strategic purpose survives because closing accounts is nobody’s job. In our experience reviewing treasury structures across multinational groups, it is common to find that a significant share of the account base serves no current operational purpose, and in some cases the number of accounts that could be closed approaches half the total.

This is not a cosmetic problem. Every account in the structure carries fees, consumes KYC and administration effort, widens the fraud surface, traps liquidity, and adds noise to cash visibility. Account rationalization is one of the highest-return projects available to a treasury team, and one of the least glamorous, which is precisely why it so rarely gets done. This article looks at why account structures grow beyond what the business needs, what the excess actually costs, and how to run a rationalization exercise that delivers a durable result rather than a one-off clean-up.

How Account Structures Grow

Account proliferation follows a small number of predictable paths. Acquisitions are the largest single contributor: an acquired company arrives with its full banking structure, and integration plans that carefully address systems, people and reporting frequently leave the bank accounts for later. Later rarely comes. Decentralised organisations add a second layer, because local finance teams open accounts to solve local problems, often with banks chosen for relationship reasons rather than group strategy, and the centre may not learn of the account until it appears in an audit confirmation.

The third path is simple institutional inertia. Accounts opened for a specific purpose, a project, a bond issue, a payroll migration, a legal entity that has since been merged, remain open long after the purpose has expired. Closing an account requires effort, signatures and coordination, and produces no visible benefit for the person doing the work. Opening an account, by contrast, always has a sponsor. The asymmetry does the rest.

We worked with one group that had grown through more than a dozen acquisitions over a decade. When we completed the first full inventory, the count came to several hundred accounts across dozens of banks, materially more than anyone in the organisation had estimated. A number of dormant accounts still held balances that had sat untouched for years, invisible to the daily cash position because they were outside the reporting perimeter entirely. The money was not lost. It was simply forgotten, which for a treasurer is scarcely better.

What the Excess Actually Costs

The direct costs are the easiest to see and the least important. Account maintenance fees, transaction charges on low-volume accounts, and banking portal subscriptions add up across a large structure, but they rarely justify a project on their own. The material costs sit elsewhere.

The first is the compliance burden. Every account attracts KYC obligations, and banks have become progressively more demanding in their periodic refresh cycles. Each refresh consumes documentation, signatures, board resolutions and follow-up correspondence. Multiplied across hundreds of accounts and dozens of banking relationships, KYC administration alone can absorb a substantial share of a lean treasury team’s capacity, effort that produces nothing except permission to keep an account the group may not need.

The second is the fraud surface. Every active account is a potential target and a potential exit route for fraudulent payments, and every dormant account is worse, because nobody is watching it. Mandates on forgotten accounts frequently include signatories who have long since left the company. In the control frameworks we help clients build, unused accounts and stale mandates are among the most common audit findings.

The third is trapped and fragmented liquidity. Cash scattered across redundant accounts is cash that is not working: not offsetting debt, not earning a proper return, not visible to the daily position. Fragmentation also degrades forecasting, because flows routed through accounts outside the core structure surface late or not at all.

From the field. A useful early test of any account structure is the mandate review. Ask for the current signatory list on every account and compare it against the current organisation chart. In our experience it is unusual not to find departed employees still holding signing authority somewhere in the structure. The gap between the two lists is a direct measure of how far account administration has drifted from operational reality.

Running the Rationalization: Inventory First

Every successful rationalization we have been involved in starts the same way, with a complete inventory. Not the list treasury believes to be complete, but a verified register built from bank confirmations, audit records and statement data. The inventory should capture, for every account: the legal entity owner, the bank and branch, the currency, the purpose, the signatories, the balance history and the transaction volume over the trailing twelve months.

With the inventory in hand, classification is straightforward:

  • Core operating accounts that route material flows and clearly stay.
  • Structural accounts required by regulation, tax, or specific market constraints, which stay but should be documented as such.
  • Low-activity accounts whose flows can be migrated into the core structure.
  • Dormant accounts with no meaningful activity, which close as soon as residual balances are swept.

The migration and closure phase is where discipline matters more than analysis. Closures fail quietly: a direct debit nobody mapped, a counterparty still paying into the old account, a bank requiring original signatures from a director who is travelling. The remedy is to treat each closure as a small project with an owner and a deadline, to redirect flows before initiating closure rather than after, and to report progress monthly. Momentum is the whole game; rationalization projects that pause tend not to restart.

Keeping the Structure Rational

A clean-up that is not followed by governance simply resets the clock. The durable fix is a permanent account governance framework with three elements. First, central approval for every new account, with a documented business case and a defined review date, so that no account can be opened that the centre does not know about. Second, an annual review of the full register against activity data, with closure as the default outcome for any account that cannot justify itself. Third, a maintained register of accounts, mandates and signatories, updated as part of the joiner and leaver process rather than rediscovered at each audit. Where volumes justify it, eBAM capabilities within the TMS or banking platforms can automate much of the administration, but the governance has to exist before the technology can enforce it.

Structure does the rest. The most effective way to need fewer accounts is to design an operating model that does not require them. An in-house bank with payments-on-behalf-of and collections-on-behalf-of arrangements can replace clusters of local operating accounts with intercompany positions. Cash pooling concentrates balances that would otherwise fragment. Virtual account structures allow a single physical account to serve purposes that once demanded many. Groups that centralise their treasury operating model typically find that a leaner account structure is not a separate project but a natural consequence.

A Quick Diagnostic: Six Questions for Your Next Treasury Meeting

☐ Do we hold a verified, current register of every bank account in the group, including entity, purpose, signatories and activity?
☐ Could a subsidiary open a new account today without central treasury knowing?
☐ Have all account mandates been reconciled against the current organisation chart within the last twelve months?
☐ Do we know which accounts had fewer than a handful of transactions in the last year, and why they remain open?
☐ Are accounts from past acquisitions fully integrated into the group structure, or still running in parallel?
☐ Is every account visible in the daily cash position, or does part of the structure sit outside the reporting perimeter?

If the answer to two or more of these is no, the account structure is managing you rather than the other way around.

Frequently Asked Questions

How many bank accounts should a multinational have?

There is no correct number. The right structure depends on the group’s footprint, regulatory constraints, and operating model. The useful question is different: can every account in the structure justify its existence against a documented purpose? A group with an in-house bank and pooling structures will typically need far fewer accounts than a decentralised group of the same size.

What is eBAM?

Electronic Bank Account Management refers to the tools and message standards that allow account opening, closure, mandate changes and signatory administration to be handled electronically between corporates and banks, typically through the TMS or banking channels. It removes much of the paper and manual effort from account administration, but it works best on top of a structure that has already been rationalized.

How long does a rationalization project take?

The inventory and classification phases can usually be completed within a few months. Migration and closure take longer, because flow redirection, bank procedures and signature requirements move at their own pace. Most groups should think in terms of a phased programme over several quarters rather than a single exercise, with the largest savings typically available in the earliest phases.

Do virtual accounts eliminate the need for physical accounts?

They reduce it substantially rather than eliminate it. Virtual account structures allow one physical account to support segregation, reconciliation and on-behalf-of arrangements that previously required many separate accounts. Regulatory, tax and market-specific requirements still make some physical local accounts unavoidable in certain jurisdictions.

FTI Treasury has provided cash and liquidity management, in-house banking and treasury outsourcing services to multinational corporations for over 30 years. Account structure design and rationalization are core elements of the operating models we build and run for clients, including consolidated visibility, pooling structures and on-behalf-of arrangements. If you would like to discuss how your account structure compares to current best practice, contact our team.

Related Services: Cash & Liquidity Management | In-House Banking | Treasury Outsourcing