In today’s economy banks are faced with a challenging interest rate environment, compressed margins, regulatory burden, and the ongoing pressure to find new clients and build franchise value.
This is good news for companies of all sizes as banks are competing aggressively for their business. As you evaluate your own banking services, and possibly contemplate a change, it makes sense to talk with more than one bank. This gives you a better chance of finding the right solution, and the right partner for your company.
Finding the “right bank” takes a lot more than a competitive interest rate on a loan. Many businesses will expand their banking relationship beyond traditional loan and deposit solutions and thus will have a vested interest in learning about additional services such as electronic banking, mobile banking, treasury, insurance, wealth management, and so on. It makes sense to create a banking scorecard that fits the specific needs of your business. After all, your business has other needs too, and finding the right partner could have a significant impact not only on your company’s financial performance, but the overall efficiency of your business. The more efficient your business, the more time you can spend trying to grow your business.
With that said, what are the most important components of your banking relationship? Create your own “scorecard” and rank products and services that are specific to your business needs, then seek a banking partner that can meet your requirements. Generally, people rely on their trusted instincts and select banks in the market that have a positive image, or where they have a prior banking relationship. However it might be a good time to meet with new banks and bankers to see how many of your business “must haves” they can handle satisfactorily. Here are some of the things to think about when considering your bank’s value proposition.
Accessibility to Capital
Let’s start with financing. A full array of products and terms should be available to meet your current needs and future needs you may have as your company grows. Secured and unsecured loans, lines of credit, and letters of credit should all be on the list.
Technology
The right mix of electronic banking and cash management services can help you move money, pay employees, and electronically pay bills or collect funds with the push of a button. Use these tools to make your business more efficient and more accurate while reducing costs.
Convenience
Most business-to-banker relationships pay more attention to the banker rather than the bank. But here are definitely a few boxes that need to be checked off when we talk about the bank’s value proposition: Is it convenient for you to do business with the bank? Do their products and policies work well with your company’s needs? Is it convenient for you to meet with your banker? Do you have access to decision makers?
Industry Experience
Does the bank have experience working within your industry? If so, how many similar clients do they have? How long have they been serving your industry? Does the bank support you with someone who specializes in your type of business or with a generalist?
Relationship and Reliability
Is your banker responsive? You don’t want a banker that’s too busy to provide proper account servicing.
That your banker is trustworthy is a given, but is your banker knowledgeable? This is perhaps the most important of the relationship boxes to consider. You need someone you can rely upon, and who wants to see your business succeed as much as you do.
Does your banker ask the right questions about your business to help ascertain your real needs? Lastly, does your banker have a solid understanding of the business banking products that are available?
Delivery Channels and Ancillary Services
Is the branch network convenient? Are there other non-banking services available such as wealth management, trust, health care or other insurance services, payroll, bookkeeping, etc.?
The Relationship – What’s Important to You?
A bank’s value proposition means different things to different people. It’s up to you to decide what your imperatives are, and to make sure you’re checking off as many boxes as possible before choosing a bank. Your company might depend on it.
Jim Gillen has more than 25 years’ experience in the financial services industry and is chief marketing officer at ESSA Bank & Trust. Based in Stroudsburg, he can be reached at jgillen@essabank.com. essabank.com
