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10/09/2015 - Christos Kiosses, Product Manager eBAM, Hanse Orga Group

Bank Fee Analysis - A Modern Herculean Task

Analyzing and reconciling bank fees is important for knowing how much you are actually paying your banks and for forecasting fees. How can companies achieve more efficient bank fee analysis?

Corporate Treasurers seeking a way to analyze and accurately verify what is being paid to financial institutions for their services need to surmount many obstacles en route to this perfect state. Those who have attempted to overcome these obstacles have realized that bank fee analysis is one of the most challenging tasks for a treasurer.


The status quo of bank fee analysis today

If a bank fee analysis is done at all at corporate level, it is usually dominated by manual tasks in many countries. Worldwide, the majority of banks still delivers their bank service bills on paper and use proprietary service codes to list the services and related fees. Hence, it is next to impossible for corporate treasurers to provide management with global bank relationship metrics.

This, however, is set to change with international initiatives, such as the Common Global Implementation – Market Practice (CGI-MP), promoting the world-wide use of standardized service codes and of electronic bank statements to help automate the bank fee management process.


What does it take for companies to regain control of this business-critical process, to enhance transparency and control, and to realize cost savings?

Track transactions, compare services, and automate the bank fees reconciliation and dispute resolution processes – this, in summary, is the road to success, if you wish to get full control over your bank fees!

The key steps to get on that road include the following:

  • Evaluate how many services you use and how many banks you have
  • Identify underutilized bank accounts that can be rationalized
  • Be consistent and diligent in your approach
  • Compare the services offered by your different banks
  • Last but not least, be prepared to ask challenging questions and negotiate your bank service fees.

By following this approach, you will be able to optimize your bank services and fees; however, you are still not in a position to respond to the following management requests:

  • How much is our corporation paying for bank services and fees?
  • Did my bank charge me as negotiated?

Therefore, the next steps are vital for obtaining reliable data for the analysis of your banks’ Performance:

  • Accelerate the bank fee allocation and reconciliation process
  • Implement a dispute management workflow to easily follow up any discrepancies between what the bank has actually charged you and what had been negotiated with the bank
  • Identify suitable technology to empower your treasury to automate the bank fee analysis processes


Conclusion

Bank fee analysis is moving up on the corporate agenda, and the banks see increasing demand from their corporate customers for electronic account analysis statements. It is, thus, to be expected that the use of electronic reporting on bank service fees will spread significantly in the years to come. By evaluating the status quo and investing in modern technology, companies can get on the road to successful bank fee analysis and, consequently, achieve more efficient processes, greater transparency and cost savings.

This is an excerpt from our whitepaper. To read the complete text, please download the whitepaper “Bank Fee Analysis – A Modern Herculean Task” here.

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