Succumbing to increased fees while being subject to sub-par service year-after-year would seem to represent an unacceptable cycle. Yet many businesses routinely acquiesce when it comes to Cash Management services, thinking that switching providers is just too complicated. That’s exactly what your current Cash Management service provider is “banking on”. It may be time to reevaluate your banking relationship and here are a few things to consider:
Does Size Matter?
While many businesses may think you need a larger bank for more sophisticated services, that isn’t necessarily the case. Most community banks in CT offer a full suite of cash management products and services to aid in cash flow management. Not to mention all of the intangible benefits such as localized decision making and their ability to respond with greater agility to customers’ requests than larger banks due to their local orientation, knowledge of your business, sector-specific awareness, and dedication to the community. In fact, most community banks have well-established commercial lending and cash management platforms, staffed by experienced professionals with big-bank experience, but who prefer the community bank customer service and work environment a community bank offers.
Location only Matters in Real Estate!
Look beyond the traditional brick and mortar location. In years past, businesses and consumers alike would align only with a bank having a nearby physical presence. With all of the conveniences afforded by electronic banking there is little to no need to enter a bank building, as has been reinforced by virtue of ongoing “distancing” restrictions. This “need” is more perception than reality.
Beyond the Term Sheet
It’s easy to see why businesses might focus on their lending needs when it comes to choosing their bank. Interestingly, the part of their business that occupies the majority of their time is most often the management of their cash through the accounts payable and receivable process. So why is it that businesses do not place a greater emphasis on their cash management banking needs over that of their borrowing needs?
Taking into account your unique business objectives, pick a bank that offers products that will streamline routine tasks, leaving you with more time for strategic thinking. Whether it be eliminating daily trips to the bank by implementing remote deposit capture, a reduction in checks issued through the use of ACH for electronic payments, or even by protecting your business’ most valuable asset, your cash, through the use of fraud protection services like Positive Pay. It is important to work with a bank that can provide the advice and tools you need to improve cash flow management, help prevent fraud, reduce costs, and maximize the productivity of your staff.
When evaluating costs, be sure you understand the full picture. Is your bank offering a la carte services or bundled pricing and solutions? Another important factor is the value placed on your deposits, specifically those in your checking account. Community banks tend to have materially lower overall cost structure and above market earnings credit and interest rates whereas national banks whose cost structure is considerably higher tend to be less competitive.
Partnership — The Fabric of our Relationship
Let’s remember that great products and pricing are only part of the equation. You will find that many banks offer the same products, but the key differentiator is the service. Is your bank there for you when you need them most? A rainy day relationship manager is more important than a fair weather one. This was most certainly another revelation and challenge many were faced with amidst the onset of the Coronavirus. More specifically businesses ability to get their bankers to respond when trying to apply for relief loans or make changes to their cash management arrangement to enable them to work remotely. Local relationship management and a genuine partnership with your bank is as critical to the success of your business as your key employees.
