Case Study – US Domestic Retailer

In 2013, a privately held retailer headquartered in the United States selected Redbridge (at the time, The Montauk Group) to conduct a bank fees and services optimization called “BRM Insight”. This ‘big-box’ retailer – with more than 200 domestic US locations – utilizes a total of seven banks for its daily cash management, cash & coin deposits, and banking needs. In addition, the client works with multiple armored car couriers to facilitate the carrying of hard cash between its stores and banks.


Client Snapshot

Revenues: $3 billion

# of Stores: 230

# of Banks: 7

# of Bank Accounts: 324

Gross Monthly Fees: $172,000

Average Daily Balances: $95 million


The engagement was initially segmented into four distinct components:

An historical analysis of services utilized, fees paid, seasonal trends, and typical balances at each of these seven banks, during the previous 12-month period (via review of each bank’s monthly account analysis);

An assessment of prospective opportunity, based on: a) understanding and matching the client’s daily needs to the most appropriate services available at each bank, b) price points being paid by this client compared to its peers at the same seven banks, and c) possible restructuring of bank accounts (e.g., type, funding method);

Bilateral negotiations with each of the seven banks pertaining specifically to pricing, followed by implementation of the agreed modifications (identified in #2 above);

Monitoring of each bank’s adherence to revised pricing and services.


Across its seven banks, this client was paying for 510 distinct banking services. Upon completing steps 1 and 2 above (historical analysis & assessment), Redbridge identified that 65 of the 510 banking services that the client was paying for were candidates for elimination, given a review of the client’s daily operation and Redbridge’s assessment of the client’s specific needs. Additionally, Redbridge indicated that based only on its BankScore™ pricing database, the client could achieve up to a 22% reduction in fees, if it were to receive ‘best-in-class’ pricing at each of its seven banks, for all of the remaining services utilized.

Bank Discussions

The client was adamant about not overhauling how it used its existing banks, meaning, this optimization effort was going to be limited to direct bank discussions (instead of a structured RFP process), and not include moving business between its banks. The focus of the direct negotiation discussions would be on pricing and modifying existing banking services. Redbridge created Bank Discussion Documents (one for each bank) to facilitate discussions between the client and each bank. Meetings occurred sequentially with each bank (approximately one discussion every two weeks); for five of the seven banks, second meetings were required.

Results of the Bank Discussions

Following the bank discussions, the client decided to eliminate 40 of the 65 services that Redbridge identified as candidates to be eliminated; these eliminations did not adversely impact the client’s operation. This reduced the total number of utilized services to 470 (from 510). Additionally, the client’s banks agreed to reduce pricing on 90 of the remaining 470 services. The impact of the service eliminations and pricing reductions were monthly savings of about $17,000 (or $204,000 annually).

Redbridge was then mandated to monitor each bank’s monthly account analysis to ensure adherence by the bank to the negotiated pricing and services structure. Although the client was pleased with some areas of the optimization – specifically the service eliminations – the lack of competitive pricing from the banks left a lot to be desired. Additionally, the absence of meaningful participation by some of the banks in providing competitive price reductions indicated to the client that perhaps these banks really did not want their business.

Round Two – Customized Analyses

With this in mind, the client was eager to achieve additional savings, and worked with Redbridge on a revised strategy: to open up the bidding for all store bank accounts by its seven banks. Redbridge created a customized cross-bank comparison template. In effect, this cross-bank comparison allows Redbridge and its clients to be able to identify a volume for a specific set of services, and then pinpoint the exact costs at each bank for the same set of services and volumes, taking into account how each bank names, segments and prices these services. In this way, Redbridge is able to quickly create and run multiple simulations, and identify theoretical outcomes.

  • A cross-bank comparison takes the various nomenclature of each bank, along with that bank’s unique pricing structure and methodology, and aligns it to all of the other banks, so that a pricing translator can be created for a specific client.

As “depository” fees were the highest group of monthly costs for this retailer, Redbridge constructed an RFP document focused solely on activity related to store deposit activity and volumes. Each bank was instructed to provide prospective pricing for this activity, including any tiered pricing (in the case that their pricing would be different based on how many stores they would eventually be awarded), and also to provide a proximity study identifying the distance between each of the client’s store locations and the nearest bank branch.

Results – Round Two

21.1% in prospective monthly fees savings or $396,000 per year;

70 stores/bank combinations changed;

40 bank services eliminated;

$115,000 in bank billing errors recouped;

100% of stores depositing via vault services.

The competitive nature of this second round proved to be significant in terms of results. Based on responses from each bank, and with the ability to use the cross-bank comparison to run multiple simulations with newly revised pricing from each bank, the client decided to move more than 70 stores amongst its existing network of seven banks. The combination of store moves and the new pricing structure across all banks led to an additional $16,000 in monthly savings. This savings combined with the savings achieved in the first round totaled $33,000 per month (or $396,000 annually). Also, this engagement helped the client achieve its initiative to ensure that armored couriers and vaults were utilized at 100% of its stores.

In addition to the realized savings, Redbridge identified bank-billing errors by monitoring each bank following implementation of the new pricing structure. In total, $115,000 in bank billing errors were identified by Redbridge and recouped by the client. Redbridge continues to monitor bank fees each month on behalf of this client.

  • Based on the historical billing issues identified, I felt we needed monitoring as it is a best practice and has proven beneficial to our company. All of our banks continue to be understanding when I advise them of billing violations, and they have provided us with all credits requested.” – Assistant Treasurer