I've found that in my case it was beneficial for both parties if I asked a rate that made it worth it for me.
Worst case scenario they said no.
Every time I lowballed, I regretted it and didn't do my best and couldn't help it.
And then there was this one project that I really liked, and I ended up taking an enormous cut to continue on that project. That was a bad idea. It was a cool project, but being underpaid so dramatically did hurt my enjoyment quite a bit. (And it wasn't a charity or anything; it was a bank.)
Ah yes the irony of capitalism.
I feel like banks are one of the last places you should try to peddle B2B/SAAS/consulting packages unless you already have a gigantic reputation to work with and/or deep domain expertise + a professional network.
Many bank execs want to sign contracts with a minimum of 5 year duration. No one wants to spend all that due diligence time & energy on a 12 month contract. So, the stakes are really high. They're going to want you to prove you will be around in a decade.
If their executive team is worried about your business continuity, but still really like the technology idea, that is where you run into the undercutting angle. They'll move it under a different cost center like "tech research and transformation initiatives" as opposed to "principal, line of business systems". They'll still talk to you, but it will be on entirely different terms than you would desire.
Disclaimer: the above is my experience in Sweden, but I imagine the same applies elsewhere