Is Your Commercial Banking Relationship Actually Competitive?

Your bank understands the economics of your relationship.

It knows your deposits, treasury revenue, credit exposure, transaction volumes, product usage, and the broader value your organization represents.

But does your organization understand the relationship just as well from the other side?

Are you receiving competitive value in return?

For many organizations, the answer isn't immediately clear.

A strong commercial banking relationship isn't defined by one fee, one rate, or one product. It's the combination of treasury pricing, liquidity, credit, service, technology, and overall relationship value.

As organizations grow and change, their banking relationships should be evaluated to make sure they're evolving with them.

1. Treasury Pricing

Treasury pricing is one of the most visible components of a commercial banking relationship, but it can also be one of the least scrutinized.

Account analysis fees can continue month after month without receiving the same review as a traditional vendor invoice.

Treasury and finance teams should understand:

• What are we paying for treasury services?
• Which services generate the majority of our fees?
• Are we still using everything we're paying for?
• When was our pricing last reviewed?
• How does our pricing compare with relevant market benchmarks?

Banks generally have standard pricing for treasury services, but that doesn't mean every organization ultimately pays the same price.

Treasury pricing can often be negotiated.

Relationship size, transaction volumes, deposits, credit facilities, competitive dynamics, and the broader banking relationship can all influence the pricing conversation.

The important question isn't simply what you're paying.

It's whether what you're paying represents fair market value.

2. Liquidity & Rates

The economics of a commercial banking relationship extend well beyond fees.

Organizations should also understand what they're receiving on the liquidity they provide to their financial institutions.

That includes questions such as:

• What is our current Earnings Credit Rate (ECR)?
• How much balance are we maintaining to offset eligible treasury fees?
• What are we earning on interest-bearing deposits?
• Are those rates competitive?
• How much excess liquidity do we maintain?
• Could that liquidity be positioned more efficiently?

A company could negotiate competitive treasury pricing while overlooking a much larger financial opportunity within its liquidity strategy.

What you're earning can be just as important as what you're paying.

That's why treasury fees and liquidity should be evaluated together as part of the overall economics of the banking relationship.

3. Credit & the Overall Relationship

Treasury shouldn't be evaluated independently from the rest of the commercial banking relationship.

Does the organization maintain a revolving credit facility?

Term debt?

Commercial card programs?

Merchant processing?

Foreign exchange?

Significant operating deposits?

These relationships can all contribute to the overall value an organization represents to its financial institution.

A company providing its bank with significant deposits, treasury revenue, credit business, card spend, or other financial services may have greater negotiating leverage than it realizes.

Your bank understands the total value of your relationship. Your organization should too.

Understanding that value creates a more informed starting point for conversations around treasury pricing, deposit rates, services, and broader relationship terms.

4. Service & Relationship Coverage

Competitive economics alone don't make a banking relationship strong.

Service matters.

One of the questions treasury and finance leaders should ask is:

Are we receiving the level of support our organization needs?

That includes evaluating whether the banking team:

• Understands the organization and its objectives
• Is responsive when issues arise
• Brings relevant ideas and opportunities forward
• Provides meaningful treasury reviews
• Understands upcoming initiatives and priorities
• Connects the organization with appropriate expertise
• Helps anticipate needs rather than simply responding to them

Commercial bankers and treasury officers can be valuable strategic partners. But they also manage portfolios of clients and competing priorities.

That's one reason organizations should remain actively engaged in managing their banking relationships rather than assuming their financial institutions are continuously reviewing every aspect of the relationship on their behalf.

5. Technology & Treasury Infrastructure

A banking relationship that worked well several years ago may not necessarily support where the organization is going next.

Companies grow. They acquire businesses. They add entities and locations. They expand into new markets. Transaction volumes increase. ERP systems change. Treasury technology evolves.

As that happens, treasury teams should periodically ask whether their banking structure and technology continue to support the organization effectively.

Consider:

• Are banking and ERP integrations efficient?
• Does treasury have sufficient visibility into cash?
• Can the organization see its positions across banks, accounts, and entities?
• Are payment and reporting processes appropriately automated?
• Are current banking platforms supporting the organization's future roadmap?
• Are there capabilities available through the bank that the organization isn't fully utilizing?

Treasury infrastructure should evolve with the business.

Sometimes the existing banking partner has the capabilities needed, but the organization isn't using them.

Other times, there may be a legitimate capability gap that needs to be addressed.

The important thing is to know the difference.

6. Total Relationship Value

Ultimately, the individual components need to be brought together.

A commercial banking relationship should be evaluated based on the total value exchanged between the organization and its financial institution.

On one side:

What are we providing to the bank?

Deposits. Credit business. Treasury revenue. Card spend. Merchant processing. Foreign exchange. Other financial services.

On the other:

What are we receiving?

Competitive pricing. Yield. Credit. Technology. Expertise. Service. Execution. Strategic support.

That doesn't mean every component has to be the cheapest or highest-paying option available.

It means the overall relationship should make economic and strategic sense for the organization.

Don't Confuse a Long Relationship With a Competitive Relationship

There can be tremendous value in a long-standing banking relationship.

Established integrations, credit history, institutional knowledge, trusted relationships, and operational familiarity all matter.

But longevity shouldn't replace periodic review.

Long-standing relationships can accumulate legacy pricing, unnecessary accounts, outdated services, or liquidity structures that made sense years ago but haven't been revisited.

A banking relationship can be strong and still have opportunities for optimization.

Those two things aren't mutually exclusive.

Does Benchmarking Mean You Need to Change Banks?

No.

At TreasurySavvy, our philosophy is:

Optimization before disruption.

Changing financial institutions can require significant resources. Accounts need to be established, integrations may need to change, payment and collection processes have to be transitioned, users need access, and internal teams have to manage implementation.

If the current banking relationship is fundamentally strong, the first objective should generally be to determine whether it can be improved.

Can pricing be adjusted?

Can deposit rates or ECR be revisited?

Can the account structure be simplified?

Can unnecessary services be eliminated?

Can technology be used more effectively?

Can relationship support improve?

If so, the organization may be able to create meaningful value without changing banks.

If the relationship no longer supports the company's needs, technology requirements, or future direction, then evaluating other financial institutions may make sense.

What Should a Commercial Banking Relationship Review Accomplish?

A commercial banking relationship review should produce more than a presentation and another meeting on the calendar.

It should help the organization understand:

• Where the relationship stands today
• What the organization is paying
• What it is earning
• How liquidity is positioned
• Whether treasury pricing is competitive
• Whether services and technology remain appropriate
• Where opportunities exist
• What needs to change
• What the treasury roadmap looks like going forward

Ideally, the review should result in specific actions and measurable outcomes.

Because simply reviewing the relationship isn't the objective.

Improving it is.

Why an Independent Perspective Matters

Banks can be valuable partners and provide significant expertise.

But every financial institution naturally approaches a relationship through the capabilities, products, and economics of its own organization.

An independent treasury advisor has a different role.

The advisor can sit on the organization's side of the table and ask:

Is our treasury pricing competitive?

Are our rates competitive?

Is our liquidity positioned appropriately?

Does our current banking structure make sense?

Are we using the right services and technology?

Is this banking relationship supporting where the organization is going next?

The goal isn't to create an adversarial relationship with the bank.

It's to bring additional market intelligence, benchmarking, and perspective into the conversation.

Independent insight can help create better treasury decisions and, ultimately, stronger banking relationships.

The Bottom Line

A competitive commercial banking relationship isn't defined by the lowest fees or the highest deposit rate.

It's the combination of pricing, liquidity, credit, service, technology, execution, and strategic alignment.

Treasury and finance leaders should understand what they're paying, what they're earning, what they're providing to their financial institutions, and what they're receiving in return.

Because the best banking relationship isn't necessarily the cheapest one.

It's the relationship that creates the right overall value for the organization.

About TreasurySavvy

TreasurySavvy is an independent treasury advisory firm helping organizations evaluate and optimize their commercial banking and treasury relationships.

We provide independent market intelligence and expertise across treasury pricing, liquidity, banking structure, commercial card programs, merchant costs, and treasury strategy to help finance and treasury teams make more informed decisions.

Is Your Banking Relationship Optimized?

If your organization hasn't recently evaluated the economics, structure, and performance of its commercial banking relationships, TreasurySavvy can provide an independent perspective on where opportunities may exist.

Contact TreasurySavvy to learn more.

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