Financial institutions pay out millions of dollars in agent bank and custody fees. Bharat Malesha, EVP of Smartstream, believes firms struggle to achieve visibility and control over costs and so fail to curb overheads – with the right help, though, they can address this situation surprisingly quickly.
As transaction volumes rise and drive costs up, the pressure on institutions to understand and control spending has intensified. Agent bank and custody fees can easily reach $50- $250m annually for large firms and so surfacing potential cost-efficiencies is an untapped area of focus for network managers.
Getting to grips with this expense category is complex, especially for big financial institutions, where network managers may be responsible for fifty to two hundred relationships with agent banks. Additionally, fee schedules often run to tens of pages with complex tiering and volume discounts, while pricing models change regularly, and agreements are only rarely automated.
