How do you benchmark bank fees?
A core Corporate Treasury interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
(1) Annual fee analysis: extract all bank fees by type (transaction fees, FX margins, facility fees, guarantee commissions). (2) Compare across banks in your panel. (3) Use industry benchmarks (AFP, VDT studies). (4) RFP for key services every 2–3 years. (5) Negotiate: bundle services (give FX business to the bank that also provides cheap guarantees).
WHAT INTERVIEWERS LISTEN FOR
- ✓Annual fee analysis by type
- ✓Compare across bank panel
- ✓Use industry benchmarks
- ✓RFP every 2-3 years
- ✓Negotiate bundled services
COMMON MISTAKES
- ✗Only looking at total fees
- ✗Ignoring FX margins
- ✗Not renegotiating regularly
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