How can we reduce or manage our corporate bank fees more effectively?
Corporate bank fees can be one of the toughest areas for treasury managers and finance professionals to understand as it relates to pricing.
With every national and regional bank often using different terms and verbiage for individual fees and AFP codes, the pricing is difficult to ascertain what good really looks like.
Bank fees can range from a variety of charges including things such as ACH, Account Reporting, Wires, Lockbox, Checks Paid and even Online Banking. It’s not uncommon today for a company to manage 100+ different bank fees that are not easily understood.
While comparing fees from one bank to another can also provide difficult and tedious, even today’s advanced Treasury Management Systems (TMS) fail to capture best-in-class pricing as well as a comprehensive treasury management review.
While technology continues to improve, 3 primary factors continue to exist in the industry causing companies to leave meaningful dollars on the table each year:
1. Treasury Managers aren’t armed with the right data to effectively negotiate. Competitive data is often not established in a comparable manner allowing for a holistic view of treasury fees.
2. Companies don’t like negotiating against their banking partners. Even armed with the data, we find companies regularly dislike having difficult conversations given their relationship.
3. Bank Relationship Managers are asked to operate within pricing confines that inhibits flexibility on pricing. This exacerbates the process of banks providing little concessions even when supported with accurate data.
Eventus has stratified various data samples finding minimal correlation in bank fee pricing to years in business, revenues of company, number of employees or even length of their banking relationship. The bank pricing schematic is one of the most highly complex and dynamic industries that we’re familiar with.
Typically, customer size, revenues, or scale drive pricing concessions in most other industries but banking is unique and ultimately requires a third-party expert to help clients navigate the complex process of not only benchmarking fees but implementing savings.
For further information on bank fee benchmarking and initiative a comprehensive treasury management review, please reach out to Inquiry@eventustreasury.com or call our team at 614.620.1195.
