UK companies are leaving millions of pounds exposed and underperforming, new research suggests

UK businesses could be losing tens of thousands of pounds a year in missed interest while leaving large sums of cash potentially unprotected, according to new research into corporate treasury practices.

This is the key finding of new research, based on a survey of 500 senior business leaders across the UK (comprising CEOs, CFOs, Finance Directors, and Managing Directors), exploring how businesses manage their cash holdings.

Finance leaders lack sufficient FSCS awareness

More than three years after the collapse of Silicon Valley Bank exposed weaknesses in corporate treasury management, many UK businesses are still misunderstanding deposit protection rules, new research suggests.

While the FSCS update to £120,000 provides a safety net for smaller entities, larger corporations face a ‘concentration risk’ where no compensation scheme exists, yet businesses of all sizes continue to pool millions in single institutions.

The survey found one in three hold over £1 million with a single bank, and the average business surveyed holds £2.21 million in cash – highlighting the scale of business savings at risk, should a bank fail. Even three quarters of those who do have multiple banking relationships, keep more than the £120,000 protection limit in their main account. 

This points to a major awareness issue. Despite almost all senior finance leaders (97%) stating they are confident their business deposits are protected against bank failure, two thirds either have no meaningful awareness of FSCS deposit protection or cannot correctly identify what it covers. Of those who claim to be aware of FSCS protection:

• Fewer than four in ten can correctly identify the £120,000 limit.
• More than a quarter still believe the limit is £85,000.
• Nearly half wrongly believe the FSCS covers e-money accounts and fintech payment providers.
• Another third was not aware it does not cover deposits held in banks outside the UK.

Kate Toumazi, CEO of Insignis, said: “For most businesses, cash sits in one or two accounts, earns whatever the bank offers, and gets reviewed when someone has time. What this research makes clear is that the consequences of that approach are not trivial. The exposure is real, the cost is quantifiable, and the time spent managing it manually adds up to weeks every year. The gap is primarily one of knowledge; businesses that understand what is available tend to act. Those that do not, cannot.”

Interest and risk optimisation are intertwined but neglected

UK businesses are missing out on tens of thousands of pounds in annual interest by leaving large cash reserves sitting in low-yield bank accounts. The study found that the average business surveyed holds £2.21 million in cash, yet could be losing around £42,000 a year in foregone interest by failing to move funds into higher-yield accounts – enough to potentially hire another member of staff.

Despite the scale of cash held, fewer than half of businesses banking with multiple providers are actively spreading that cash to increase their returns or reduce risk. Most use one main bank for the bulk of their cash, with smaller amounts held elsewhere – an arrangement many senior leaders inherited and have not reviewed since.

This is particularly pronounced for small businesses between ten and 49 employees – over half have not changed their approach since the FSCS protection limit increased in December 2025.

Weeks of senior time are avoidably lost to finance admin

Senior finance leaders spend an average of 4.5 hours per week managing banking relationships including contacting banks, resolving issues, and monitoring accounts. Over a 48-week working year, that is more than five working weeks. For CEOs, the figure is higher still at 6.9 hours per week, equivalent to more than nine working weeks a year spent on finance admin.

For smaller businesses, the picture is more acute: nearly half of businesses with between ten and 49 employees are not actively monitoring cash across all their accounts, leaving them without a clear view of what is held where, exposing them to greater risk.