Conducting a request for proposal (RFP) for banking services is one of the most time-consuming tasks treasury teams face. Whether it’s validating existing pricing and services, or soliciting proposals for new services, treasury groups are often stretched to the limit trying to get the process done in a timely and efficient manner. In a new Treasury in Practice guide, underwritten by KeyBank, AFP provides treasurers with best practices for conducting a successful banking RFP.

For treasury, the work involved with an RFP begins long before it’s sent out and includes placing it in proper context, generating the right questions, identifying the right vendors, and setting up a plan to evaluate responses. Additionally, the process has heavy implications for bank relationships. As Bruce Lynn, CTP, managing partner at The Financial Executives Consulting Group LLC notes, “at the end of the day you will be selecting one bank and quite possibly telling the others to go away.”  

According to the AFP 2011 Benchmarking Survey, most organizations rely on one to three banks in their revolver with whom half of the organizations spend five years or less. Thus, the door is always open to change.

Best Practices

1. What’s your target? The single most important thing to have is a very firm and clear understanding of what you’re looking for before you start.
2. Stick to your guns. It is imperative that you stay focused.
3. Communicate. Maintain communication throughout the process with the vendors who respond to your RFP. 
4. Create a timeline. Make sure that you have a clear timeline and communicate it to the vendors.
5. Get decision-makers to sit in on final presentations. The soft questions will have an impact on the final decision.
6. Negotiate. Your contract is a contract. It’s always negotiable. Ask for standard contract terms as part of the RFP and use this in your negotiation. You typically have more leverage in the earlier phases of the RFP in terms of pricing and contracting leverage.
7. Explain to the losing banks why they lost. By telling the bank why they didn’t get the business, you approach it as a relationship.
8. Assign a point person. Have one person who is responsible for managing the entire process in order to ensure that your company gets all the information it needs.
9. Use solid project management. Ensure that you dedicate sufficient time to the project, sufficient internal resources, and that you allocate the budget to move forward. Continue to monitor pricing, per your terms, through the end of the contract term.
10. Involve the day-to-day user. You have to get the folks who are going to use the bank product or service excited about it.
11. Don’t conduct in-person interviews back-to-back. It’s better to space them out and have a team meeting after each one for feedback and reflection.
12. Check references. Treasurers tend to be very honest. They’ll tell you the good, bad and the ugly. The reference calls can be a huge help.

Download How to Conduct a Successful RFP for Banking Serviceshere.