Partner With Your Bank: The Relationship Will Pay Dividends

With so little time and so much to do, Americans have become fixated on efficiency. We have our groceries delivered, TV and movies streamed, prescriptions sent by mail, and homes automated. In this respect, Americans are acting a lot like businesses, who have long used vendors to deliver services. For their part, businesses have taken efficiency to the next level. They have found that they can save time and drive better bargains by sourcing all of their office supplies from a single vendor, who provides everything from printer toner to coffee pods. They have also begun to consolidate professional services, using just one law firm, for example, to meet all of their needs. There is one area, however, where businesses have hesitated. Many companies still use multiple banks. They may rely on one bank to handle accounts payable, a second to provide capital, and a third to run their corporate credit card program.

The rationale is that these different activities are so complex that they demand the focused expertise of specialized providers. This fragmented approach may become a thing of the past, however. Consolidation in the banking industry has given rise not just to larger banks but also to banks capable of delivering a broad range of services. These large banks have developed internal systems that now enable them to pull together the appropriate services for an individual business and deliver them through a single point of contact. Their goal is to establish deeper and more comprehensive relationships with their customers — and provide superior service. For businesses, a close relationship with a single bank makes good sense.

It offers the assurance of working with a single team of bankers who possess a comprehensive view of their operations and aspirations and who can tailor a suite of financial services — whether they include treasury management, lending, depository services, access to capital markets or others — to meet their needs. Businesses that work closely with a full service bank can be more strategic in their financial operations, reducing their costs while increasing their effectiveness. Additionally, by concentrating their financial dealings, businesses can set the stage to achieve goals that would be difficult to meet otherwise. In today’s big data environment, where data analytics bring a significant edge, funneling transactions through a single bank can help create the consolidated financial and banking data platform required to put those analytics to work. Creating a national banking platform The experience of one of the leading security alarm and monitoring companies illustrates how a single banking relationship can help a business more easily achieve its goals

The company initially turned to Capital One Bank for a line of credit, and through the underwriting process, Capital One learned a great deal about the company, its finances and operations. At the same time, the company became familiar with the bank’s staff and the full extent of its capabilities.

During the months spent working together, the companies explored other avenues for collaboration. Capital One eventually established a national banking platform for the alarm company, overseen by a dedicated manager, which included:

• A full suite of treasury management products and services to support its day-to-day banking needs;

• Products such as online commercial banking (Treasury Optimizer), automated clearing house (ACH) module, online wire module, electronic debit protection, electronic data interchange (EDI) reporting, zero balance accounts, positive pay and remote deposit;

• Depository accounts including concentration and operating accounts; and

• More than 120 corporate cards.

Not every company needs this scale of services, but most have a variety of banking needs that could be consolidated. If your bank relationships are not integrated, it may be time to explore this option.

A good starting point for companies considering bringing more of their business to a single bank is to evaluate existing banking relationships. If you’re satisfied with the services a financial institution provides in one area, you should begin to investigate whether it has the experience to take on responsibilities in others.

When choosing a banking partner, you should consider a number of factors, including:

• the partner’s knowledge of your industry,

• the breadth of the services it offers,

• its ability to provide new services as your company evolves,

• its demonstrated ability to be innovative and bring best practices,

• the stability and reputation of the banking partner, and

• the quality of its bankers and teams.

Another important consideration is the support it offers for making the transition. The bank should have a process in place that minimizes potential disruptions and should be willing to take the lead in activities such as opening new accounts or transferring records.

Equally important, it should assign a dedicated relationship manager who has the experience to guide you smoothly through the transition. Win-win for banks & businesses For businesses, having a single relationship with a large bank can provide the best of all possible worlds: the scope and technological capabilities of a global financial institution, combined with the personal touch and big-picture overview of a primary advisor. The synergies that result from consolidating banking relationships are considerable, from cost savings to a holistic view of a business’s finances and operations.

But when it comes down to it, the advantages for businesses are the same as those for individual people.

Working with a single financial organization frees an organization to focus on the things that are most important to its future. About the Authors: David Dineen is the marketing manager of Capital One Bank’s Commercial & Specialty Finance Account Executive Division. He is responsible for establishing and leading the account executives who provide personalized support to clients. John Robuck is managing director of the Security Finance lending practice within Capital One Bank Commercial & Specialty Finance. In this role, he leads a team in the underwriting and structuring of senior asset-based and cash-flow financings for middle-market businesses.