Treasury Management Fees: How Banks Are Driving Revenue Through Strategic Pricing
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Time to read: 10 mins +-
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In 2024, Treasury Management (TM) fees experienced a significant uptick, growing by 6.6% year-over-year—the strongest performance since 2021. This growth was primarily driven by deliberate pricing strategies rather than new product innovations or digital investments.
Banks that leveraged data-driven tools, such as Curinos’ Commercial Analyzer, were better positioned to optimize their pricing strategies, maintain competitiveness, and enhance profitability.
To navigate what’s ahead, commercial banks will need to take a comprehensive view of TM price changes in the context of planned and likely changes to ECR. Those that do will be best positioned to meet their growth targets while minimizing potential client disruptions.
Key Drivers of Treasury Management Fee Growth
Data-Driven Pricing Strategies
Nearly half of the TM fee growth in 2024 occurred in the first quarter, coinciding with annual fee increases
Banks maintained these higher prices throughout the year, indicating effective pricing strategies
Tools like Curinos’ Commercial Analyzer provided insights into market trends, enabling banks to make informed pricing decisions
Exception Pricing Optimization
Banks doubled their exception pricing efforts in 2024, focusing on high-value clients
Data from Commercial Analyzer helped identify areas where exception pricing could be effectively implemented without compromising client relationships
3. Benchmarking and Market Intelligence
Commercial Analyzer offers access to a vast database of over $3 trillion in commercial deposits, sourced from more than 30 financial institutions
YoY Gross TM Fee Growth – FY21 to FY24
Note(s): YoY growth calculated using January to December totals for each year
Source(s): Curinos TM Fee Analyzer
*Click to enlarge
Strategic Recommendations
To Maximize TM Fee Revenue:
Implement Structured Annual Price Reviews
Use data from Commercial Analyzer to inform pricing decisions.
Enhance Exception Pricing Strategies
Identify clients where exception pricing can be applied effectively
Leverage Market Intelligence Tools
Utilize Commercial Analyzer for benchmarking and performance analysis
Align Digital Investments with Revenue Goals
Focus on digital initiatives that directly contribute to fee income
Monitor Product Adoption and Performance
Assess the impact of new products on existing revenue streams
FAQs
What are Treasury Management (TM) Fees?
TM fees are charges banks apply for cash management services such as ACH, wires, lockbox, and fraud protection. They are a significant and growing non-interest revenue stream.
Why are TM fees growing faster now?
The growth is driven primarily by price optimization, especially through structured annual reviews and exception pricing. This contrasts with prior years where fee growth lagged inflation and volume gains.
Do digital investments help increase TM fees?
Not directly. While digital upgrades improve client experience, they have yet to significantly drive new product usage or fee expansion. In some cases, they may replace higher-fee services with lower-fee alternatives.
How can banks ensure competitive yet profitable TM pricing?
By using benchmarking tools to understand market pricing, client elasticity, and service profitability. Aligning this data with client-facing teams ensures the strategy is both profitable and defendable.
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