Curinos data indicate that banks have maintained or extended their robust 5.4% treasury-management (TM) price increases that they put in place in January 2024, even despite flat and even declining volumes. This reflects the broader post-pandemic trend of TM growth being driven by price. Top-quartile banks have expanded their growth vs. December, and the bottom quartile banks have contracted only slightly (Figure 1).
This year’s price changes are “sticking” with minimal reaction from clients because what they’re paying after earnings credit rates (ECR) is relatively stable if not lower than what they had been paying. The ratio of hard dollar fees collected vs. total gross fees has fallen by more than 15% since the start of the recent rate-increase cycle.
But going into 2025, this dynamic will change. With market rates set to decline and perhaps accelerate downward starting in September, many commercial banks are planning accordingly. Many of their clients will see lower ECRs in 2025 or at least will be expecting to see them, and they’ll be paying closer attention to changes in fee prices.
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.
Gross TM Fee Growth Rates by Quartile
Dec. 2023 vs. May 2024 & Dec. 2023 vs. Jan. 2024
Treasury Management pricing has held up
this year but is likely to fall in 2025.
