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Treasury Management Pricing Events: Banks Remain Assertive

This Month In Commercial Banking

As Curinos has previously reported, banks are planning their largestever annual price increases for treasury management (TM) services in 2023. And recent research shows that, for the most part, these plans have been undeterred by the banking market disruptions of March. In fact, when asked if they had changed their 2023 TM pricing targets after the market volatility of the first quarter, fully 81% of banks said no. (See Figure 1.) 

Figure 1:

Source: Curinos Analyzer, includes all participating banks across size and geography ​

Over the past three years, pricing events have focused more heavily on standard prices. In 2023, banks are still planning to increase standard prices but are also increasingly focusing on discounts and waivers. This reflects not only the need to raise fee income overall to offset profitability headwinds but also because changing customer deposit behaviors are shifting relationship profitability at a faster pace than we’ve seen in years.   

Among banks that have adjusted plans for their pricing event in response to the March volatility, the most common move was to grant greater client-level flexibility so that sales personnel could respond to at-risk clients on the margin. The next most common action was split between lowering or increasing overall targets in response to the market volatility.  

One question that bankers have asked is whether customers and banks will succumb to “pricing fatigue.” By parsing the bank-level plans beneath our broader survey responses, we see that those that in the past have brought good discipline to their pricing event are continuing to sustain that momentum in 2023. We hypothesize that the conviction to follow through with these events is likely connected to improvements in their relationship-pricing capabilities to apply surgical price-change recommendations at the client level.  

While some banks are still implementing 2023 increases, most are focusing on their strategies for 2024. The most important steps in this process will be for them to compare the results of the 2023 event with their original plans and with what the rest of the market was able to capture, followed by an in-depth analysis of what drove any discrepancies. Such an approach can provide insights into what low-hanging fruit remains to be captured and can help inform how to identify and address any major constraints to pricing optimization.  

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