Why Bank Fee Monitoring Is Essential for Treasury and Cash Management Optimization

The Hidden Cost of Overlooking Bank Fees

Navigating cash management fees is challenging, and many companies often overlook this area due to limited time, resources, or in-house expertise. However, ignoring these fees can be a costly mistake, as they can represent up to 1% of a company’s turnover.

Monitoring bank fees effectively is a powerful tool to better understand the scope of your cash management services, identify cost-saving opportunities, and improve your relationships with banking partners.

Bank Fee Monitoring Helps You Understand Cash Management Services

One of the often-overlooked benefits of bank fee monitoring is that it offers companies a clearer picture of the cash management services they are using. Regularly reviewing fee structures provides an excellent opportunity to re-evaluate account setups and identify unnecessary or overlapping services.

Companies using software like HawkeyeBSB, a bank fee monitoring platform developed by Redbridge, find that, on average, 10% of their accounts never record any transactions. Digitalization is a key enabler for better visibility into which services are actively used.

Another useful tool for interpreting cash management services is the use of AFP codes. These codes allow companies to better understand each line item on their bank fee statements and, more importantly, to compare fees across multiple banks. Although banks typically follow AFP standards, it’s important to note that definitions may vary slightly, so requesting clarification from your bank on key services can be very beneficial.

Reducing Cash Management Costs With Bank Fee Monitoring

The most immediate and obvious reason to monitor bank fees is to identify opportunities for cost reduction. Over time, banks may adjust their pricing due to changes in market conditions, regulations, or internal policies. Without active oversight, companies may end up paying significantly more than what was initially agreed upon.

Keeping a close eye on fee evolution helps companies identify discrepancies between current charges and historical data, revealing potential overcharges or rate increases.

A practical approach is to monitor fees over a six- to twelve-month period, analyzing both volume and rate fluctuations. This enables companies to quickly detect unexpected charges or pricing errors. For international organizations, bank fee analysis is particularly useful to ensure pricing consistency across regions in line with the group’s global banking terms.

When it’s time to negotiate, having this data allows companies to approach discussions from a position of strength. After renegotiation, continued monitoring is essential to ensure that new pricing is correctly implemented and that actual savings are tracked. In the long run, this discipline provides companies with a meaningful cost advantage that can be reinvested elsewhere.

How Bank Fee Monitoring Can Strengthen Banking Relationships

A lesser known but valuable benefit of bank fee tracking is the positive effect it can have on a company’s banking relationships. While some worry that raising fee concerns might strain those relationships, the opposite is often true when handled correctly.

By taking an informed and proactive approach to fee management, companies show banks that they are serious, knowledgeable clients who care about financial transparency and cash management efficiency.

Monitoring fees also opens the door for banks to propose additional cash management solutions that may align with the company’s needs. In this way, the process becomes a collaborative effort that can deepen the relationship.

For multinational corporations, bank fee visibility also helps identify which banks provide the most value in specific areas, guiding decisions on which institutions to expand relationships with or consider for new accounts. Companies that regularly review their fees are seen as responsible partners, which can lead to more strategic and mutually beneficial banking arrangements.

Bank Fee Monitoring Pays Off in Efficiency and Cost Savings

Monitoring cash management bank fees may seem like a small administrative task, but it plays a critical role in a company’s overall financial strategy. By regularly reviewing and understanding these charges, companies can:

• Gain valuable insights into their cash management needs
• Identify cost-saving opportunities through fee corrections
• Build stronger, more strategic relationships with their banking partners

In today’s competitive and cost-conscious environment, bank fee monitoring is not just a best practice, it’s a strategic imperative for any treasury or finance team.