Fee Income Optimization for Banks

In a shifting economic landscape, non-interest commercial banking income is even more critical to profitability. That’s where we come in.

Weaknesses and inconsistencies in pricing strategy, processes, and controls undermine commercial fee income. Our experience shows that banks don’t review a third of their accounts for pricing, usage, or inactivity, and they fail to capture some 25% of collectable fees—which affects overall profitability. We have a solution for that. 

Tapping our distinctive blend of industry, technical, and operational expertise, we look across  all dimensions to build a plan for driving sustainable increases in treasury management revenue. We compare your products and capabilities to the market using data and analytics, assess alignment between pricing and the value your clients receive, and evaluate the effectiveness of your sales delivery model.

It’s an undeniably different approach that finds and targets revenue from current products and customers, new products and customer segments, and platform improvements such as alternative processing approaches. What’s more, it’s built to deliver those benefits as quickly as possible.

Results You Can Expect 

  • Estimated Annualized Benefits 
  • Improved earnings credit rates (ECR) - $20 million 
  • Reduction of exception pricing (Discounting) - $13.5 million 
  • Reduction of waivers/charge-offs - $7.5 million 
  • Increases to standard pricing - $1 million

What We Offer 

Customized to your lines of business and culture, our rapid assessments pinpoint opportunities for short-term impact in the following areas:

Enhance pricing processes 

Pricing processes often hold opportunities for immediate revenue lift without significant effort. We look for weaknesses and inconsistencies around expiring promotional pricing, exception pricing, waivers of service codes, and discounts for service codes—and then provide action-ready recommendations for addressing them.

Fine-tune your pricing structure 

How could pricing enhancements drive greater income? We review your ECR pricing structure and current service codes to identify missing or misclassified codes. We use this analysis to recommend service code groupings by type of service and recommend pricing enhancements such as value-add, punitive, customized, grandfathered, and flat-deal pricing. 

Understand the impact of pricing on profitability

Could you increase profitability through adjustments to cross-selling and pricing tactics? We’ll help you find out with an assessment that includes a client-by-client analysis of service-level pricing, as well as a review of your processes for annual price increases. We also examine profitability by segment, industry, size, and other dimensions—producing insight to drive relevant updates.

Minimize fee leakage 

Optimizing fee income isn’t just about increasing it. You also need to make sure you’re billing correctly for account/volume activity and receiving monthly service charges as intended. We will review processes to identify and correct issues in the movement of volume activity data that causes billing errors and fee leakage. 

Increase sales effectiveness 

Build essential organizational capabilities and a culture focused on optimizing fee income. We will help you improve cross-selling efficiency through sales coaching, customer engagement models and techniques, and enablement tools. We also use customer segmentation and sales stratification models by product and source to optimize sales and product usage.

Want to learn more?