Implementing Midaz in a banking environment requires a strategic approach to entity hierarchy and account structuring. Below are best practices to optimize the setup of organizations, ledgers, accounts, portfolios, and segments for operational efficiency and scalability.

Optimal Hierarchy of Organizations and Ledgers

Single vs. Multiple Organizations

Banks operating as a single legal entity typically require one Organization in Midaz. However, for banking groups with subsidiaries, a hierarchical structure is recommended, with a parent organization overseeing multiple child organizations. This setup aligns with corporate governance and enables data segregation per entity.

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Note

The organization structure should reflect your corporate structure.

Using Multiple Ledgers

Within an organization, decide how many ledgers to use based on operational needs. A common approach is to maintain a primary ledger for customer transactions while using additional ledgers for specialized purposes, such as treasury operations or regulatory segmentation.

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Note

Use multiple ledgers only when necessary to minimize complexity. Transfers between ledgers require external flow orchestration via APIs.

Efficient Account Structuring for Retail and Corporate Banking

Retail Customers – Portfolio per Customer

For retail banking, best practice is to create a Portfolio for each customer, containing individual accounts for different asset types (e.g., checking, savings, credit card). This setup allows efficient balance retrieval and streamlined operations.

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Entity Registry

The Entity Registry plugin manages personal data such as tax IDs, addresses, and banking aliases.

Corporate Clients – Hierarchical Accounts

For corporate banking, utilize child accounts within portfolios to reflect internal structuring. A company might have a parent account for its main funds and child accounts for subdivisions like payroll or expense tracking.

Internal Accounts

Establish internal accounts for revenue, expenses, and settlement flows. Dedicated accounts for "Fee Income – USD" or "Interest Expense – USD" ensure clear financial reporting.