When financial executives talk about bank fees most respond with two comments – “too many” and “too much.” Small wonder:

1. Most companies pay a bewildering array of bank fees. Typical banking renewal agreements cover credit facility pricing, operating line fees, current account service charges, cash management fees, interest compensation arrangements, and credit/debit card charges. When it comes time to negotiate banking costs, it’s often hard to know where to begin.
2. Nearly all companies pay too much. Most lack the benchmarking information they need to negotiate effectively. Too many inherit rate structures that reflect yesterday’s credit assessment or volumes. Foreign exchange mark-ups are rarely a discussion point at renewal time. Few companies take the time to properly prepare and benchmark their fee negotiation case. Most companies reap what they sow.

There's no question that negotiating bank fees is complicated and confusing. There's also no question that few companies manage these negotiations well. The real question is why. To answer this question, we need to look at the structural advantages that banks enjoy in fee negotiations.