do you have the right banks? capabilities, service, and price · envision rtp replacing some wire...

Do You Have The Right Banks?

Capabilities, Service, and Price

April 8, 2019

Confidential© 2019 Phoenix-Hecht

2

What is important to you?

Credit Capabilities Technology

Ease of

Doing

Business

RelationshipCustomer

ServicePrice

Satisfaction With The Last Credit Renewal-Terms and Process

Expectations

3


Source: Treasury Management Monitor™

7.1%

5.1%

38.2%

41.1%

39.0%

42.9%

15.7%

10.8%

Middle Market

Large Corporate

Below Meets Above Exceeds

Credit Capabilities TechnologyEase of Doing

BusinessRelationship

Customer

ServicePrice


▪ Integrated Receivables with Open Invoice File Matching-All sources including ACH/email/PDF

▪ Real Time Payments for Receivables-C2B and B2B

▪ Integrated Payables-All methods including: RTP, commercial card, Zelle, and push to card

▪ Real Time Payments for Payables-B2C and B2B

▪ Bank Electronic Invoice Management, Approval, and Archive System

▪ Use of API’s

▪ Swift GPS

2019: Not All Banks Are Equal

4

CapabilitiesCredit TechnologyEase of Doing


Customer

ServicePrice

Core Product Satisfaction 5



5.5%

4.5%

32.6%

38.0%

43.6%

43.7%

18.2%

13.9%

Middle Market

Large Corporate

Below Meets Above Exceeds

Expectations

Percentage of Payment Transactions Made BY Corporations

Middle Market Large Corporate

Card

Wire

ACH

Check

Calendar Year

67.0 62.6%

19.0% 21.6%

8.0%6.5%

6.0%9.3%

2013 2019

6


49.0% 43.9%

33.0%38.8%

11.0% 10.7%

7.0% 6.6%

2013 2019


Corporate Implementation Plans - 2019 7



Percent Rated 4 or 5 (Scale 1 to 5 with 5 = Likely)

0% 5% 10% 15% 20% 25%

Implement same-day ACH

Implement a consolidated transmission of ACH, lockbox and wire remittance data

Implement an electronic invoice and approval system

Implement electronic payments via a vendor network

Implement mobile banking for treasury management services

Eliminate ACH and Check generation through outsourcing

Large Corporate Middle Market

Real Time Payments

0% 10% 20% 30% 40% 50% 60% 70% 80%

Less than 20%

20% to 80%

Over 80%

Middle Market Large Corporate

Percentage of Wires Which Might Convert to RTP

Interested in RTP Payments

69.0% 66.1%Large Corporate Middle Market

Envision RTP Replacing Some Wire Transfers


8



Credit Capabilities Ease of Doing

Business RelationshipCustomer

ServicePriceTechnology

Corporates Currently Making Consumer Payments


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

RTP is attractive for consumer payments

Zelle is attractive for consumer payments


9



B2C Payments


Receivables 6.0

Consolidation of All Remittance Data

10

Use of AI to match ACH + email/PDF

Intraday Decisioning

Deduction Management

and

Receivables Matching

Consolidated Data Transmission

Archive

Mailed Checks to LBX

ACH

Commercial Card

EDI

Shipping

Accounts

Receivable

Customer

Service

Credit

Collections

Sales

Treasury

RDC to LBX

Wire

Website

Real Time Payments

Data

Capture

Vendor Portal

Remittance Information Processing Delays Matter

Impact On Customer Service, Collections, Shipping, Sales, and DSO

Cash Application From Lockbox Data Transmission

Postal Survey™

Nationwide Mailings

Wholesale Lockbox

CITY TRANSIT

HOURS

Boston, MA 41.2

Pasadena, CA 44.3

Atlanta, GA 44.6

Saint Louis, MO 47.6

Dallas, TX 47.8

Charlotte, NC 48.6

Pittsburgh, PA 49.3

Philadelphia, PA 49.9

Chicago, IL 50.1

Baltimore, MD 50.5

Memphis, TN 52.9

Los Angeles, CA 54.4

Minneapolis, MN 54.6

11


Source: Treasury Management Monitor™ and Fall 2018 Postal Survey™

6.57

7.26

Worst

Best

Middle Market

5.77

6.82

Worst

Best

Large Corporate

Currently Using Integrated Payables


0% 20% 40% 60% 80% 100%

Checks

ACH payments

Domestic wires

Card payments for invoices

Electronic payments (nonACH)

0% 20% 40% 60% 80% 100%

Checks

ACH payments

Domestic wires

Card payments for invoices

Electronic payments (nonACH)

Percent of Companies Issuing Payment Types Using Integrated Payables


12



Integrated Payables


13

Credit Capabilities Technology RelationshipCustomer

ServicePrice

Ease of

Doing

Business

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Ease of webtransaction

initiation

Processingaccount

maintenancerequests

Ease of doingbusiness

Middle MarketLarge Corporate

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Ease of webtransaction

initiation

Processingaccount

maintenancerequests

Ease of doingbusiness

Exceptional

Meets Expectations


Which of Your Banks Would You Recommend To A Treasury Colleague?

14



Middle Market

Top 5 banks 83%

All other banks 85%

Large Corporate

Top 5 banks 91%

All other banks 78%


Business

Customer

ServicePriceRelationship

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Lead Credit

Credit and Treasury

Credit Only

Treasury Only

Top 5 Banks Other Banks

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Lead Credit

Credit and Treasury

Credit Only

Treasury Only

Corporate Bank Relationship Plans-2019

0% 5% 10% 15% 20% 25% 30%

Issue an RFP for one or more treasury services

Reallocate treasury management business at existing banks

Replace a current credit bank



15


Probability of Doing Business With a New Bank

0% 5% 10% 15% 20% 25% 30%

Middle Market

Large Corporate

Top 5 Banks

Top 5 Banks

All Other Banks

All Other Banks

Chance of changing bank in

the next 12 months

Plan to

Issue RFP

Plan to Issue RFP

Percent Rated 4 or 5 (Scale 1 to 5 with 5 = Likely)

16



Are You a Customer Service “Settler”?

17



BusinessRelationship PriceCustomer

Service

Scale 1 to 9 with 5 = Meets Expectations, 9 = ExceptionalSource: Treasury Management Monitor™

Large Corporate

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Resolvingissues on first

attempt

Dedicatedclient servicesrepresentative

Overallcustomerservice

Middle Market

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Resolvingissues on first

attempt

Dedicatedclient servicesrepresentative

Overallcustomerservice

Exceptional

Meets Expectations

Got Technical Support? 18

Confidential© 2019 Phoenix-Hecht Scale 1 to 9 with 5 = Meets Expectations, 9 = ExceptionalSource: Treasury Management Monitor™

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Web-basedreporting andtransaction

initiation

ACH Credit card topay invoices

Middle Market

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Web-basedreporting andtransaction

initiation

ACH Credit card topay invoices

Large Corporate

Exceptional

Meets Expectations

How Attentive Is Your Treasury Management Relationship Manager? 19

Confidential© 2019 Phoenix-Hecht Scale 1 to 9 with 5 = Meets Expectations, 9 = ExceptionalSource: Treasury Management Monitor™

Large Corporate

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Anticipates needfor new/modified

services

Providing promptcall follow-up

Overalleffectiveness

Exceptional

Meets Expectations 5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

Anticipates needfor new/modified

services

Providing promptcall follow-up

Overalleffectiveness

Middle Market

-2% -1% 0% 1% 2% 3%

Coin & Currency

Depository Services

General Account Services

General ACH Services

Information Services

Lockbox Services

Paper Disbursement Reconciliation Services

Paper Disbursement Services

Wire & Other Funds Transfer Services

Largest Banks Regional Banks

Common Statement Analysis

20


Source: 2018 Bank Price Study

Same bank

Same company

2017 vs. 2018



Customer

Service Price


ACH Item OriginatedExpected Prices By Volume

Tier 1 Banks

Lowest Volume

15

Highest Volume

62,000

50th percentile $0.21 $0.05


2018 Bank Pricing

Volume drives service line item price

Lowest Volume

1

Highest Volume

1,100

50th Percentile $0.51 $0.26


Same Day ACH Credit Originated Expected Prices by Volume

Tier 1 Banks

21



Wholesale Lockbox Item-Complete ProcessingExpected Prices By Volume

Tier 1 Banks Lowest Volume

100

Highest Volume

10,000



2018 Bank Pricing

Lowest Volume

50

Highest Volume

9,000



Wholesale Lockbox Item-Complete Processing Expected Prices by Volume

Tier 2 Banks

22


Price does vary between bank tiers


Product Family Family

Subtotal

Influence on

Overall Price

Percentile

Family Price

Percentile

General Account Services $1,170 5.5% 86

Depository Services $41 0.7% 18

Paper Disbursement Services $3,668 16.2% 72

Paper Disbursement Reconciliation Services $3,595 13.0% 66

General ACH Services $4,820 22.0% 100

Wire & Other Funds Transfer Services $1,941 4.1% 58

Information Services $8,793 38.5% 94

Total Analyzed Fees $24,028 99

Total Monthly Fees: $25,293 95% of which is included in this analysis.

Size of Relationship: Bank’s 2nd Quartile

Sample Benchmarking Report Summary 23


Sample Benchmarking Report-Service Level Detail Report

With Bank Service Line Mappings

24


Potential Savings

Service Description Volume Unit Price

Service

Charge

Price At 50%

Percentile

Service Charge

At 50%

Percentile Difference

ACH Maintenance 13 $100.00 $1,300.00 $37.00 $481.00 $819.00

ACH File 62 $20.00 $1,240.00 $9.00 $558.00 $682.00

EDI Maintenance-Receipt 3 $600.00 $1,800.00 $120.00 $360.00 $1,440.00

Previous Day Account Balance 45 $75.00 $3,375.00 $30.00 $1,350.00 $2,025.00

Previous Day Transaction 8,880 $0.18 $1,598.40 $0.096 $852.48 $745.92

Intraday Account Balance 22 $75.00 $1,650.00 $33.00 $726.00 $924.00

Intraday Item 1,516 $0.30 $454.80 $0.134 $203.14 $251.66

Intraday Item 5,023 $0.20 $1,004.60 $0.134 $673.08 $331.52

Total $7,219.10


25


26

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

-2.00 -1.50 -1.00 -0.50 0.00 0.50 1.00 1.50

ECR Spread (under) over 90 Day T-bill

T-Bill: 1.46%


Steps to Manage Bank Fees

Monitor Account Analysis Fees

▪ Minimalist: benchmark prices annually using January account analysis statement

▪ Proactive: use bank relationship management software monthly to track

Contracted price variances

Inactive accounts

Closed accounts

Redundant services

Volume reasonability

Charges for discontinued services

Structural Review of Treasury Management Relationships

▪ Re-engineer your A/R and A/P processes. Get ready for faster information/payment flows

▪ Ensure that you optimize your account structure and treasury management system

▪ Identify accounts and services no longer needed

▪ Identify new applications to save you time, FTE’s, and lower overall costs

▪ Renegotiate your ECR

▪ Perform annual provider comparisons-capabilities, service, price

27


▪ Treasury services are becoming more technologically complex

▪ Continuing scarcity of corporate I.T. resources for treasury implementations

▪ Banks are increasingly integrated with client ERP and TMS systems

▪ Increased use of API’s

▪ Not all new technology solutions are offered by every bank

Why Manage Your Bank Partnerships for the Long-Term? 28


Transparency, price, and quality are key to each long-term relationship


29Do You Have The Right Banks?

Credit Capabilities Technology

Ease of

Doing

Business

RelationshipCustomer

ServicePrice

James G. Brunnquell, CTP

Senior Vice President

919.314.2822

[email protected]

The exclusive property of Phoenix-Hecht® this material is a privileged communication, and is not to be copied from, published, or divulged to others.

© 2019 Phoenix-Hecht. All Rights Reserved

Confidential

do you have the right banks? capabilities, service, and price · envision rtp replacing some wire...

Documents