The News: Recent analysis from the Reserve Bank of Australia shows that banks are relying on businesses to make up the fee shortfall from consumers. The new restrictions on consumer overdraft charges have led to a 16% reduction in the amount of fees households pay banks.  But despite the lost fee income from retail customers, banks’ overall fee income has remained unchanged because of more fees from businesses. The RBA estimates the amount of fees small and large businesses pay banks jumped 13.9% between 2009 and 2010.

Our View: Business bank executives everywhere are feeling the pressure to make up revenue lost from the retail bank. The challenge they face is how to meet these aggressive revenue goals in a low-growth environment and without alienating existing business customers through sudden fee hikes. The best banks will ensure RMs consistently apply existing fee covenants while innovating new, value-add for-fee products and services.

How We Can Help: See how the industry’s best RMs and banks collect fees from business customers. And review a step-by-step walk through to see how one bank generates additional fee revenue and new customers by administering businesses’ payments.

And read the full article at the Sydney Morning Herald.

Business banks are missing opportunities with a key customer segment: the businesses that sit right on the threshold between the Small Business and Middle Market lines of business. These businesses have outgrown the support and credit processes of the small business division, but they are too small to warrant the full suite of middle market products and services.  Neither division serves them well, nor has either division made these businesses a primary, strategic focus. They constitute what we on the research team have termed “the messy middle.” Read More »

The end of the recession does not mean the end of difficult decisions or hard work for commercial banks. In fact much of the hard work lies ahead. 

 That’s the key takeaway from a recent BBB meeting of senior European banking executives.  Until recently, commercial banks embraced a “be-all-things-to-all-customers” and a “grow-at-all-costs” strategy. It was both cause and symptom of a relationship approach to banking, where an aggressive focus on profitability and risk took a back seat to a cozy and comfortable relationship with customers.  That approach simply cannot succeed in today’s low-margin, low-demand environment.  Read More »