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Treasury Management Challenges and How to Solve Them – Part I

Treasury Management Challenges and How to Solve Them

Are you wondering how to deal with your top treasury management challenges and how to solve them? You’re not alone. Community banks and credit unions around the nation experience similar challenges in their Treasury Management departments. In this three-part article, I share the top eight challenges that treasury management officers (“TMOs”) face and provide you with ideas on how to deal with each one.

As I work with community financial institutions around the nation, the top concern I hear is “The bankers are giving away treasury management services.” One institution’s TMO shared once, “Marcia, every time they give away our products and services, they’re telling us we don’t matter.” Wow! That comment got to me. So, I am purposed to increase visibility and create awareness of the value of treasury management services. Allow me to start with the top two challenges:

Challenge #1: Waiving all (or most) treasury management fees.

Waiving your treasury management fees creates two major issues in your institution. First, you’re missing out in an extraordinary source of non-interest fee income. One of my clients discovered the institution waived $1 million dollars a year in TM fees. That is unacceptable! Second, your employees’ morale suffers as the employees who support and sell TM products feel they don’t matter.

Solution: Stop waiving fees! That sounds like the right, simple solution, right? It’s not that simple. Charging for products and services that have been “free” takes a change in culture starting at the top. The president/CEO needs to acknowledge the value of TM services. One way is to allocate the appropriate resources to sell and support TM services.

Challenge #2: Account Analysis System is turned off.

Many institutions currently have the Account Analysis System (AAS) turned off . Therefore, they waive all the TM products or “hard charge” (meaning, directly charge the business checking accounts) for specific products used. Business customers do not like hard charges.

Solution: Turn Account Analysis system on. Imagine the AAS is your automatic billing system for your business clients. When it is turned on, a specific business checking account type triggers the core system to produce an account analysis statement monthly. This special “analyzed statement” is like an X-Ray of your business customer or member’s monthly activity. Therefore, the statement helps you identify cross-selling opportunities. You can also encourage your customer or member to increase their core deposits to cover their fees.

The Account Analysis system allows you to charge for all your treasury management products and services. Therefore, the only service that should be hard charged on the day of the incident is overdraft fees. Now businesses pay for all banking services (including account maintenance, checks written, deposited items, deposit tickets, etc.) with their core deposits! This is called “soft charging.”

We will continue with the next top Treasury Management challenges and how to solve them in Part II of this article. Stay with me as there are several other top challenges!

Treasury Management – The Best Kept Secret in Bank Fee Generation!

Treasury Management - The best kept secret in bank fee generation

Treasury Management aka Cash Management is the best kept secret in bank fee generation. Why? Because many business bankers don’t know these services well and, therefore, are afraid to talk about them with customers and prospects. When I was starting my banking career, I was the secretary in the cash management area of the bank. Part of my job was to type (over and over) sales proposals for the cash management sales team.

One of my happiest days in that department was the day I got my first PC and I had a revolutionary idea—create a cash management proposal manual where the sales team could simply pick out whatever pages they wanted to use on every product to respond to the “RFP’s” (request for proposal). Creating this manual reduced the amount of time I spent typing a proposal from several hours to about fifteen minutes. And if the sales rep changed their mind about a service? No problem. I could fix it or add or change anything within a few minutes. I was the hero of the department!

But kidding aside, from all that typing about each service and during my six years in the cash management department, first as a secretary, later as an operations liaison, and then customer service representative, gave me the opportunity to learn about cash management products that banks offer. I became very knowledgeable about cash management and to this day I remember what each product does, why it’s offered to business banking customers, and how it works behind the scenes—including how banks can improve fee income! A few years ago, the term cash management was changed (or should we say “updated”) to Treasury Management to reflect the vast number of services offered to help business clients.

So, we'll use the term treasury management to refer to business banking products and services designed specifically for business customers and sold by business banking sales teams or treasury management sales teams.

What is treasury management anyway? My own simple definition: Treasury management are all the banking services banks offer to business clients to help them handle and maximize their cash on a daily basis.

Below are some of the most known treasury management products:



If you are a business banker, it is important to learn more about treasury management services. They will significantly increase your fee income, bring in deposits to help fund loans, and business clients will be better served. As a result, your bank’s profitability will increase.


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