The Commonwealth Bank of Australia (CBA), Australia’s largest bank, is launching a new foreign exchange service targeting Small and Medium Enterprises (SMEs).
A CBA spokesperson told Profit & Loss that further details could not be provided at this time due to market sensitivities. However, in the bank’s recently released half year profit results document, it was revealed that a dedicated foreign exchange sales force, paid on a commission basis, had been introduced to its business banking unit.
The bank is now expected to embark on an aggressive marketing strategy to win more business in the SME sector. SME clients have been known to be charged as high as 100 basis points for transactions under US$20,000 plus a A$5 processing fee per transaction.
Such high margins have attracted several specialist foreign exchange service providers into the SME space including Custom House, OzForex, Travelex and Western Union.