Deciphering the Secrets of Bank Fees The Decryption Key for Success. Dan Gill, CTP Senior Director Redbridge Analytics

Transcription

1 Deciphering the Secrets of Bank Fees The Decryption Key for Success Dan Gill, CTP Senior Director Redbridge Analytics

2 Who are you? How many corporate practitioners? How many bankers? How many are domestic only? How many are global?

3 What do you know? How much does it cost to run your banking operations globally? How many bank accounts do you have? Are you familiar with the term RAROC? Do you have negotiated pricing from each bank? In the US how much are you earning on your balances? How much does the bank charge you to insure those balances? What areas of the world are you missing visibility into your service usage and charges?

4 Who do you work with? Which of your banks give you: The best pricing The best rates The best service quality The best debt terms The best statements How do your pricing and terms compare to the bank s other customers?

5 Take Aways Understand how bank fee statements give you Accessibility to your cash management engine Learn how to enforce Accountability with your banking vendors and recalibrate Learn how your bank fee statements can give Visibility into your entire operation Plan ahead with the power of Predictability

6 What is Account Analysis? A bill for services from a vendor A summary of all of your cash management activity for a month A valuable reporting tool Every balance, every rate, every price, volume & charge for every service For every account For every bank Forever Around the world A way to evaluate your entire cash flow cycle A way to become a Treasury Superhero

7 Our Challenges Different services Different math Different formats Little time Even less time No time Can t get the data Overwhelmed by data

8 Locked up in Confusion

9 Your Super Abilities Accessibility Visibility Accountability Predictability

10 Accessibility to our bank fee information

11 No Bill from Some Banks

12 A different bill from other banks

13

14 Standardized Statements are The Key to Accessibility Statement formats developed in a vacuum, are of little use. Every deviation from a standard means valuable time and money we have to spend trying to decipher what each bank is sending us

15 Account Analysis Statement Standards In the US, more than 110 banks can deliver the ANSI/X Electronic Account Analysis Statement Internationally, more than 20 banks in 40 countries can delivery the global bank service billing statement known as the BSB

16 16 BSB?

17 We are now receiving files from across the globe! 17

18 Visibility into our bank relationships from all directions

19 Standardizing Services With little in common between the paper statements of different banks, the 822 (and now the international BSB) provide an overall standardization of the statements from different banks. In order to perform any type of comparison on account analysis statements across banks, we must translate each of them into a common language. Still, nearly every bank uses unique descriptions of some sort on the services that they offer to their corporate customers.

20 How can they be standardized? Banks all label and market their services using unique terminology Can we really expect two people at two different banks to make the same decision on what AFP Code to assign to a particular service? There must be a better way

21 AFP Service Codes The Problem Think of the following services provided by different banks you do business with: Account Maintenance Monthly Fee Maintenance Maint. Charge Since each bank uses a different description for services that are essentially equivalent, there is no way to answer key questions of bank fee audit. Which of my banks are giving me the best price on these services? How much is my company spending on maintenance fees as a whole? Which countries are the most expensive for me to bank in? Without a standardized way to identify services from different banks, the task of answering these basic questions can be quite difficult.

22 22 AFP Services Codes: a harmonized product classification ACT0000 SWF20000 TURKEY «Hesap kullanım ücreti TL Gerçek» TURKEY «SWIFT MT940 Kullanım» UK «ACCOUNT MAINTENANCE» UK «Ebanking - SwiftNet - Running fees - Reporting MT940 - via SWIFT» FRANCE «Frais de Tenue de Compte» FRANCE «E-Banking MT940 Banque/Client AFP Global Services Codes will provide you an harmonized wording between countries and will help you to consolidated same type of products and services.

23 More granularity than you might realize Domestic or International Maintenance or transactional Processing, Exception, Reporting, Punitive Delivery method Automated or Manual Bundled or unbundled

24 Once we have access to our bank fee statements we can gain visibility into our treasury operations VISIBILITY into whatever interests you Compare Aggregate services across banks, subsidiaries, regions Regions, Departments, Banks Visibility into bank fees is key! Spend Less Time verifying fee statements Centralized Visibility understand the activities of subsidiaries Establish a Baseline for Negotiation Idenfity Errors and recover erroneous charges Archive fee statements automatically, electronically

25 Visibility gives us answers to unanswerable questions We need to be able to Aggregate We need to be able to Compare Total Bank Expense in Japan? All In Cost per Positive Pay Item? Effective ECR across these accounts? Why don t my detail accounts add up to my summary account? Who gives me the best pricing on disbursement services? Should I open my new accounts at SuperBank or AwesomeBank? Should I move my accounts to a different bank? Who gives me the most effective ECR net of FDIC?

26 Accountability of our vendor banks

27 Understand the landscape Banks & Bankers are under intense pressure We tend to treat our banking vendors different than other vendors We don t often know enough about our own operations and costs to do anything

28 Understanding Accountability Building bank relationship accountability is actually the key first step It is the savings gained through your accountability plan that will get you the attention necessary to become a treasury superhero

29 Building Accountability Establish a Baseline Monitor Effectively Discover every account Receive all of the billing data Evaluate & Compare Pricing Justify service purchases Evaluate earnings credit Consider your bank choices Automate statement Accessibility Identify and notify on all violations of the baseline It is a lot more than just price Approve before paying Validate Services & Accounts Regular Communication

30 Predictability of our banking operations

31 Planning instead of reacting Preparation Execution Accessibility to the fees & performance of each account Visibility into every statement for every month The ability to aggregate & compare quickly and easily Model future scenarios Budget future fees Anticipate needs in response to your business Become a strategic player in company decisions

32 32 Questions? Dan Gill, CTP Senior Director Redbridge Analytics