Bank Relationship Management
John Landry
Often Overlooked
Four ideas to extract maximum value from your bank partners
M
uch has been said and written about how to go
about choosing a bank to support your company’s
needs. There are a great many tools, including
those available from AFP itself, which facilitate a thorough and
thoughtful selection process. And, of course, there are dozens of
consultants who will happily run a selection process for you.
After the initial bank selection process, however, how do
you ensure that you are getting the most value from your
bank relationship and managing it a manner that will yield
the greatest results? Based on my experience working with
corporate treasury and finance professionals, here are four
ideas to extract the greatest value from your bank, make your
job easier, and elevate your corporate status in the process.
An important milestone is to have that conversation
with your bank partner. That seems obvious, but I have
stopped being surprised when I speak with senior treasury
executives who don’t know the head of their cash and trade
management bank. Establishing a senior relationship within
your bank partner will enhance your leverage and unlock
value from the relationship in many ways including pricing,
enhanced service and bespoke solutions.
Recommendation: Ask to meet the head of your cash and
trade management bank. Ideally, this is before or at the time
of awarding your business but it is never too late. Discuss
what you expect from the relationship and ensure that
commitment is shared.
What do you expect?
The circumstances of your firm, its culture and priorities
may mean that right now, all you need is a vendor to
process payments and collections. That is a valid choice.
However, for a company with sophisticated cash cycles,
evolving risk issues, aggressive marketing, expanding
markets or formidable competition, your bank can provide
you solutions, support and advice to navigate these and
other increasingly complex challenges, often for free or at a
discount to your costs or risks today.
Ask for help
Your cash and trade bank will have a significant portfolio of
clients with similar attributes to your company. This may mean
competitors, but also buyers, suppliers and others within your
market. It should also have deep experience with clients outside
your industry, but who have or are facing similar working
capital and risk issues. Sometimes breakout solutions can come
from places you wouldn’t expect. The experience your bank
partner has amassed from these clients is usually eagerly shared,
within the confines of client confidentially, of course.
www.AFPonline.org AFP Exchange I 37
Copyright ©2014 by the Association for Financial Professionals. All rights reserved in all countries.
Bank Relationship Management
The basis for this help is rooted in reaching out and having
a conversation with your bank, though not necessarily
through the traditional relationship manager channel.
The discussion you are looking for is with a member of
the cash and trade management group, and has some very
specific elements to it. You should be looking to explain
your working capital challenges and roadmap, but also ask
ahead of that meeting for your bank partner to bring some
benchmark information about various peers in your industry.
Some banks have developed quite sophisticated surveys
with input from hundreds or thousands of treasurers and
make analysts available to build assessments of your business
practices and distill those into key similarities, differences and
the most impactful suggested adjustments to put into action.
That discussion should also cover your bank’s new
product development plans. Banks continually develop
new capabilities and look for clients willing to design and
implement those developments. Your participation in those
pilot programs can yield significant advantages, such as some
of your bespoke requests included in development or reduced
fees in exchange for your participation and feedback.
Recommendation: Ask your bank partner to perform a
working capital benchmark assessment against your peers
and against best-in-class treasury organizations. Ask them
to share their development schedule and discuss if any of
their forthcoming developments match your willingness to
participate in the pilot program.
Don’t be a bottleneck
While the treasurer’s group has traditionally been, and
will likely continue to be, the nexus of the cash and trade
management banking relationship, some banks have
developed many new applications that can help drive
significant outcomes for other areas of your company. The
challenge for the banks is finding the right contact at the
client, and treasurers can act as a point of connectivity
within their organizations to other key leaders. Facilitating
discussions between your bank partner and your broader
organization can result in significant advantages for both the
company and your stature as it strengthens your position
in negotiating price, services and support from your bank
within your core cash and trade activities.
A sophisticated bank partner will have developed specific
capabilities designed to support your marketing efforts,
transportation expense and risk management, and align
your procurement practices with your working capital goals.
None of these is a traditional bank role nor are they functions
within your business your bank is likely to have deep ties. You
can help unlock that value.
Recommendation: Ask the bank associates to explain
their capabilities specifically supporting your company’s
marketing efforts, supply chain management, procurement,
transportation and logistics. Check with your colleagues and
facilitate meetings with the specialists at the bank.
Make their network your network
Your bank should be a thought leader—a source of
information about developing regulations and market practices.
While not every corporation can afford to run a government
and/or industry relations practice, the right bank partner will
be very engaged with both, and can provide insight into what
changes are on the horizon that will impact you in the near
future. Your bank should also be a channel to voice your views
into changing regulations and market practices.
Your bank can also be a great source of talent for
your treasury team. Your bank is supporting hundreds
or thousands of clients and develops views on the highperforming counterparts at clients’ Treasury organizations.
Banks are often aware of staffing movements and can
sometimes assist with an introduction to a high-performer
between roles. International banks additionally often know of
clients in other markets moving into your home market and
can spot available talent early.
Recommendation: Seek your bank’s input on the next
challenge you are working through, whether it be trying to
fill a critical job, understanding proposed regulatory changes
or making your voice heard in industry discussions.
In navigating today’s increasingly complex marketplace,
your bank can and should be your strategic partner. And
from establishing a senior relationship within your bank to
tapping into their expansive network, there are numerous
ways that you can ensure you are receiving the greatest value
from your existing partnership. By taking your banking
relationship to the next level, not only will your company
benefit, but your status within the organization will too.
John Landry is the Head of Citi’s Treasury and Trade Solutions
business in Canada.
38 I AFP Exchange October 2014
Copyright ©2014 by the Association for Financial Professionals. All rights reserved in all countries.