Why a Payments Infrastructure Review Should Happen Before Your Bank Forces One
A £400m turnover business was settling 18 currencies through a single UK bank account. The arrangement had worked for years. Then it stopped working.
The bank’s risk appetite shifted. New internal policies were applied retrospectively. The business received 90 days notice to find alternative settlement routes for currencies representing 40% of its payment volume.
This is not an unusual story. We see variations of it quarterly.
The Pattern Behind Banking Dependency Risk
Most mid-market and large corporates build their treasury infrastructure reactively. A banking relationship is established early. It expands as the business grows. Currency access gets added incrementally. Payment rails multiply.
The result, often, is concentration. One bank holds too much. One corridor carries too much volume. One FX provider sets all the rates.
This works until it does not. Banks change strategy. Regulators apply pressure. Risk teams redefine acceptable client profiles. When that happens, the business with concentrated infrastructure faces a compressed timeline to rebuild what should have been diversified from the start.
A payments infrastructure review conducted proactively costs a fraction of what emergency rebuilding costs. More importantly, it preserves optionality when optionality matters most.
What a Treasury Infrastructure Audit Actually Examines
The term gets used loosely. A genuine treasury infrastructure audit covers several dimensions that many businesses have never mapped systematically.
Banking Concentration and Counterparty Limits
How many banks hold operating accounts. What percentage of payment volume flows through each. Whether any single bank’s exit would create operational disruption. What notice periods apply. Whether secondary relationships exist in name only or carry genuine operational readiness.
Currency Access and Corridor Depth
Which currencies the business actively settles. Through which rails. Via which intermediaries. Whether SWIFT is the default when local clearing would be faster and cheaper. Whether the business has direct access to SEPA or relies on correspondent banking chains that add cost and delay.
Payment Flow Concentration by Corridor
High-volume corridors deserve particular attention. If 60% of outbound payments travel one route, that route needs redundancy. Payment flow concentration is a risk that compounds. A single disruption affects a disproportionate share of operations.
FX Execution and Pricing Transparency
Where rates come from. Whether the business benchmarks against interbank. How spreads compare across providers. Whether the treasury team has visibility into execution quality or simply accepts what the bank quotes.
Regulatory and Compliance Exposure
Whether current arrangements will survive evolving compliance requirements. How prepared the infrastructure is for new reporting obligations. Whether counterparties are themselves under regulatory pressure that might affect service continuity.
The Cost Difference Between Proactive and Reactive
We worked with a business last year that had six months to prepare for a planned expansion into three new markets. The payments infrastructure review took four weeks. Implementation took another eight. The total advisory cost was a rounding error against annual FX savings.
Compare that to the £400m business mentioned above. Ninety days to replace settlement infrastructure for seven currencies. Emergency onboarding with new counterparties. Negotiating from a position of need rather than choice. Temporary arrangements that became semi-permanent. Higher spreads locked in because time did not permit proper competition.
The direct costs were material. The indirect costs, in management time and operational risk, were higher still.
This is the pattern. Proactive infrastructure work happens on your timeline, with full optionality. Reactive work happens on someone else’s timeline, with constrained choices.
When a Payments Infrastructure Review Makes Sense
There are specific moments when this work delivers disproportionate value.
Before a material change in payment volume. If growth projections suggest doubling throughput within two years, current infrastructure may not scale. Better to know now.
Before entering new currency corridors. Adding a new market often means adding new settlement requirements. A payments infrastructure review identifies whether existing banking relationships can support the expansion or whether new counterparties are needed.
After a banking relationship change. If one bank exits or reduces service, the instinct is to replace like with like. A broader review often reveals that the old arrangement was itself suboptimal.
During PE acquisition or integration. Investors increasingly expect treasury infrastructure to be auditable, diversified, and cost-efficient. A treasury infrastructure audit before or shortly after acquisition creates a baseline and identifies quick improvements.
When the CFO or Treasurer is new. Fresh eyes on inherited infrastructure often reveal assumptions that no longer hold. A structured review accelerates understanding and builds credibility with the board.
The Perspective That Comes From Scale
KWP Holdings has conducted this work across £3.4bn in annualised payment flow. We maintain relationships with over 120 counterparties across 38 currencies. Fourteen years of operating in this space means we have seen most configurations and most failure modes.
That perspective matters. A payments infrastructure review is only as useful as the benchmarks against which current arrangements are measured. Knowing what good looks like, across different business models and currency mixes, is not something that can be researched quickly. It accumulates through years of direct engagement.
We are not selling software or banking products. Our role is advisory. When we recommend a change, it is because the change serves the client’s interests, not because we earn margin on the transaction.
What Clients Typically Discover
The findings vary, but certain themes recur.
FX costs are almost always higher than they need to be. The spread between what businesses pay and what they could pay with proper execution is often 15 to 40 basis points. On meaningful volume, that compounds into significant annual savings.
Banking dependency risk is usually underestimated. Businesses that believe they have banking diversity often discover that their secondary relationships lack the account structures or currency access to serve as genuine alternatives.
Cross-border payment corridors are frequently inefficient. Payments routed through SWIFT when local rails are available. Payments settled in USD when direct currency pairs exist. Each inefficiency costs money and time.
Documentation and operational procedures often lag behind actual practice. This creates compliance exposure and makes future transitions harder than they should be.
Frequently asked questions
How long does a payments infrastructure review typically take?
For a mid-market corporate with standard complexity, the initial review phase takes three to four weeks. This includes data gathering, counterparty mapping, and preliminary findings. Implementation support, if required, follows a separate timeline based on the changes identified.
What information do we need to provide to begin?
Bank statements for the past 12 months, a list of currencies actively settled, current banking and FX provider agreements, and an overview of payment volumes by corridor. We can work with incomplete information initially and identify gaps as part of the process.
Does a treasury infrastructure audit require changing our existing banking relationships?
Not necessarily. The audit identifies risks and inefficiencies. Many clients choose to address these through renegotiation with existing providers rather than wholesale change. The goal is informed decision-making, not change for its own sake.
How do we measure the return on this type of advisory engagement?
Directly, through documented FX savings and reduced banking fees. Indirectly, through reduced banking dependency risk and improved operational resilience. Most clients see payback within the first year through execution improvements alone.
A Conversation Worth Having
If your treasury infrastructure has evolved organically over several years, a structured review typically surfaces value. Sometimes that value is cost savings. Sometimes it is risk reduction. Often it is both.
We are happy to discuss whether this work makes sense for your situation. No obligation, no pitch. Just a practical conversation about what we see and whether it applies.
Worth a conversation.
Photo by Diane Picchiottino on Unsplash