Revenue Leakage for Cash Management

Revenue leakage can be a chronic killer of cash management businesses – especially if you don’t realize how pervasive it is. Zafin’s revenue leakage calculator can run the numbers for your bank.

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What is revenue leakage?

Revenue leakage is the failure to collect all potential revenues due. There are many ways cash management businesses can leak revenues, so we did our own research to isolate the impact of the two most prevalent sources – processing errors and poor price governance – and built a calculator to translate that research into insight for our clients.

 

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How does the calculator work?

We then developed leakage estimates for each of the factors based on the experience of four large banks with assets ranging from $100 billion to over $1 trillion, located in North America, Europe and the Middle East. To this group, we added input from Deloitte’s Revenue Leakage Advisory, which works with Tier 1 banks globally, helping them quantify these metrics.

We can now apply these findings to any bank’s cash management business by estimating just the size of the bank’s cash management business, the degree to which it relies on manual processes, and its exposure to large clients within its global transaction banking portfolio.

 

What did we find?

For the most common scenarios, the calculator yields an approximate leakage range of three to 12 percent of existing revenues. In other words, a $1 billion cash management business with an experience in line with these averages could be leaking anywhere from $30 to $120 million every year.

 

What can you do?

Contact us today to set up a demonstration of the calculator – and learn how your bank stacks up.

 

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Zafin’s Revenue Leakage Calculator for Global Transaction Banking

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