Companies - Banking/Card Acquiring
All of our work is tailored to individual clients' needs. Our projects however are typically either based around a review/benchmark of arrangements or assistance with a tender process.
Benchmarking Review of Bank and Card Acquiring Tariffs:
The Rationale:
For many companies, banking and card acquiring costs can be substantial. It is common, however, for companies to feel that their ability to negotiate with their bank is compromised by the need for borrowing arrangements and their reluctance/inability to move bank.
Increasingly, banks are reluctant to enter in to a tender process when the primary reason is to obtain lower pricing from the incumbent bank. When banks do tender, they do not always offer their best terms if they feel that a company does not intend to actively consider moving bank.
Focus on Banking is able to review your current arrangements and compare tariffs/terms to those we see offered to similar sized organisations with comparable transaction profiles. This information will enable you to maximise savings by negotiating with your bank/card acquirer from a position of strength and avoid the need to seek quotes from other banks. Crucially, our advice also ensures that important bank relationships are not damaged.
As well as savings through reduced tariffs, our review process will often identify savings in the less obvious areas of the arrangements.
The Service:
- Accurate benchmark of bank and card acquiring tariffs to the market place
- Review of account structures and use of balances
- Overview of bank funding - rates, fees and structure
- Advice on negotiating lower charges and improved cash management terms
- Review of banking and cash management processes
- Review of use of the banking system
- Overview of any interest rate management products in place/proposed by banks
- Overview of FX risk management
- Overview of treasury controls and procedures
The Benefits:
- Significant reductions in bank and card acquiring charges
- Improvements in cash management (reduced interest costs/increased interest income)
- Identification of any errors in charging and/or calculating interest
- Increased internal efficiency and external use of the banking system
- Useful comparison to peers
- Time saved (i.e. when compared to seeking formal quotes from all banks)
- Banking relationships enhanced
- Internal controls and procedures improved
Banking Review and Tender:
The Rationale:
When an organisation feels that a tender process is appropriate we are able to provide specialist assistance at each stage of the tender project for either mainstream banking, card acquiring or both.
Not only are internal resources saved, we can add real value to the project by reviewing current internal arrangements together with your use of banking products and services. We will often identify savings in our review process that exceed any fee we charge for managing the tender project.
The Service:
- Management of all or part of the tender process
- Preparation of an invitation to tender document
- Review of processes and use of the banking system - separate report provided highlighting potential savings
- Clear evaluation of tenders with all hidden costs identified
- Assistance with short listing banks and clarification process
The Benefits:
- Expert assistance obtained in completing the tender process
- Professional and thorough documentation ensures keener pricing from banks
- Processes and use of the banking system reviewed and improvements identified
- Thorough evaluation of tenders
- Minimal strain on internal resources - time saved
- Independent body seen to be managing the process - banks can see that it is a fair and through process
News
Our experience is, however, that it remains a competitive market place and banks do want to lend to good quality covenants and retain existing or win new money transmission business. We continue to help clients reduce costs and if your bank has increased its income from lines of credit or charges then it is probably a good time to review the whole relationship to ensure that in overall terms pricing and charges remain competitive.
This has driven charities to look harder for ways to reduce costs and improve efficiency. Focus on Banking has now worked with 15 major UK charities in the last two years and has been able to generate savings in banking and credit/debit card acquiring arrangements of well over £500,000.
Whilst undoubtedly for certain types of contracts, authorities will benefit from economies of scale, this does not necessarily apply to banking. In fact banks have tended to show little appetite for complicated joint contracts and will not usually offer discounts or reduced pricing when several authorities collaborate.
Maintaining and increasing client balances held has become a key target for banks and there has never been a better time to review relationships.
We have now worked with more than 65 of the UK’s largest professional firms and the number continues to grow.
Although we are not aware of any recent challenges in respect of banking contracts, it is now vital to ensure that Bank Tender documentation clearly outlines the criteria and scoring methodology in order to avoid any potential challenge.
Focus on Banking has vast experience in tendering Local Authority banking contacts and we are familiar with how banks will respond to the questions asked. We are therefore able to devise bespoke scoring systems to ensure that the contract is awarded to the most appropriate bank. Without professional involvement in the production of evaluation criteria, Local Authorities face the risk of having to award a bank contract based on the evaluation scores even though in real terms the highest scoring bank does not offer the best value for money.
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