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Bank Relationship Management: 3 Lessons from Treasury Execs

Nov 16, 2016
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Tom Hunt, CTP, Director of Treasury Services, AFP

Over the past several weeks, I attended AFP Executive roundtables in Minneapolis, Chicago, Boston and New York with treasurers from various industries and company sizes. A few key themes emerged as we discussed bank relationship management against the backdrop of a low yield environment, money market reform, and a concerned economic outlook with developing bank headline risk.

Lesson #1:  Corporate treasurers don’t want to solve bank problems.

Treasurers handle many tasks—cash and liquidity management being high on the list. The structure of accounts, activity flows and internal processes are not taken lightly, and much time is devoted to maintaining and supporting the structure. As one treasurer explained, a bank recently approached them about opening an account just to have a flow through for activity. Had the treasurer agreed to this request, it would have opened up new SOX controls for review, reconcilements, and additional workflows. It added little to no value to the corporate to do so, but the bank asked for it to help fulfill an internal mandate for more operational activity. The treasurer has less of a desire to do business with the bank as a result.

Another example is a discussion around revolvers and allocating share of the wallet—a practice that is very commonplace for treasurers and their banking providers. Treasurers allocate everything from bank accounts, liquidity management, foreign exchange, investment banking, etc. Some corporates mentioned their bank relationship managers didn’t value certain business because the managers didn’t receive internal credit at the bank for the activity. I’m fairly certain that all got worked out, but it’s another example of how bank relationship management is changing and the role of the treasurer expanding—all the while trying to be efficient in managing relationships and keeping their banks content.

Lesson #2: Send the right person.

Issues can arise when bank files are delayed, systems are backlogged or there is a breakdown in process between the treasury department and the bank. In that instance, one treasurer mentioned to please make sure to send the right person to solve the issue. Matching the company’s issue with a bank representative that is capable of working through the issue and resolving it is the most ideal outcome for treasury. A company recently had an operational issue in file transmission. Sending the treasury officer to investigate first and responding with a proposed new service was not the intended outcome from the corporate—it was a large example of time wasted. Having senior management contacts at the bank for the company CFO and treasurer is a great example of setting a good process for communication at the highest levels.   

Lesson #3: Think longer term.

Treasurers often talk about how they are being pitched new business from their banks.  They don’t mind listening to pitches; they often learn about new developments, identify trends, and are able to keep abreast of what’s going on. They do appreciate well-thought-out services that match with their business model, company structure, process flows and identifying and supporting who are really the true decision-makers. Oftentimes, it’s not solely the treasurer or assistant treasurer. If it’s a new service with a heavy dependence on back office operations or IT, it helps to know the key drivers for importance and also who the gatekeepers are for that process in treasury. Knowing a company well helps develop and foster long-term relationships—something both the treasury department and the bank highly value. 

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