Improve Your Relationships with Business Banks

To be good stewards of their organization’s finances, treasury professionals need to nurture close ties with their partner banks. When their priorities are effectively aligned, banking should be a symbiotic experience. But often, that is not reality.

Corporate treasury and finance teams that are dissatisfied with strategic aspects of their banking relationships may consider changing institutions. Sometimes this may be the right choice, but there are also options for improving the way a company works with the banks it already has in place.

I’ve learned, in working with Fortune 500 financial institutions, that CFOs and treasurers can use the following three approaches to boost the value of their existing banking relationships.

1. Communicate early and regularly.

The first key to nurturing a close relationship with your organization’s bankers is to communicate regularly, not only in times of need. Quarterly meetings with each partner bank allow for a good rhythm in which the corporate treasury/finance team can provide the bank with updates on your business, clearly articulate your organizational goals, and share information about any emerging opportunities and challenges. Depending on the size of your company, you may want to include the CFO, controller, and/or treasurer in these meetings.

Such consistency and transparency in communication builds trust. It also gives your bank the opportunity to offer relevant guidance or introduce you to new products and solutions. When it comes to questions around what’s going on in financial markets, banks have research and experience to draw on. Tapping into their knowledge base can give your organization a leg up on the competition. For example, don’t be afraid to ask your banks how you should structure your investment ladder—this is their area of expertise.

Keep in mind that information sharing needs to be a two-way street. The only way that your bank can truly provide insights into the best financial options for your organization is by understanding your business.

Your goal should be to develop a relationship with each of your institutions that becomes something of a partnership—where success for one is success for all. Because trust and communication are fundamental to any type of relationship, engaging with your bank regularly is an important step in moving toward that goal.

2. Include your bankers in your professional network.

Networking is just as important in the digital age as in the past—perhaps even more critical. Fortunately, social media applications, industry- or job-specific forums, and other digital tools make wide-scale networking much easier today. You no longer have to gather with colleagues and peers in an onsite meeting room or attend out-of-town conferences if you want to expand your connections. Still, building a robust professional network requires some concerted effort.

Take the time to expand your network with and through your banking partners. When you believe in the value your banks are providing, and they believe in you, these connections do not seem forced; instead, they’re a welcome opportunity. Your banks are likely already associated with some of your peers in your industry, so they can help you make connections with other treasury and finance professionals that may turn out to be mutually beneficial relationships.

During my time at a technology startup in Seattle, I worked with various banks and experienced firsthand the benefits of cultivating these types of mutually beneficial relationships. Over time, my company’s banking partners connected my team with peer groups and other like-minded industry professionals. Those connections grew our professional network and were tremendously beneficial to us, at both the organizational and individual level. In exchange, we helped our banking partners grow by referring them to other businesses in our network.

Another benefit of including bankers and venture capital firms within your professional network is that many of these businesses create highly valuable industry surveys and reports. The data they collect can give your company access to information that would not normally be at your fingertips. And having access to the most recent data about industry trends simplifies the process of benchmarking your business against peers and competitors.

3. Be proactive with updates on your business.

In addition to meeting with your bankers on a regular schedule, your treasury or finance team needs to provide one-off updates whenever you have news to report. Proactively informing your banking partner about your upcoming needs and long-term strategy lays the foundation for a truly fruitful relationship.

Banks appreciate the insight into the business’s long-term perspective, and your organization may benefit via more accommodating bank decisions. For instance, you might already have shared with your bank that you’re expecting to issue debt in eight or nine months, when a potential acquisition emerges that would require capital in the shorter term. If your banking partner understands your business, and can see all the moving parts underlying your strategy, then when you need capital to fund the prospective acquisition, your bank’s answer is more likely to be yes.

Open lines of communication about your banking needs convey stability and give your bank time to partner with you on crafting viable solutions as needs arise. Thus, by keeping your bank updated as your prospects and external environment evolve, you are better situated to respond proactively, instead of just being reactive.

In your communication with your banks, whatever the frequency, be willing and prepared to describe not just your financial plans, but your company’s story. Bankers can read balance sheets and run financial models, but you’ll build their trust and confidence in your organization if they understand how you want to grow, what plan of action you have in place, and which key players are prepared to execute on that plan and manage any issues that may arise.

Sell your bank on your organization’s long-term vision with the same excitement and energy you use to sell products to your customers. The goal is to convey your story in a way that achieves the long-term buy-in that benefits you both.

Next Steps

As we wade into the unknown future, made less predictable than ever by the pandemic, establishing a firm foundation for the relationships between your business and your partner banks will undoubtedly be a key to success.

Like most relationships—both professional and personal—there are no fast and easy solutions. But also like most relationships, there are certain steps that CFOs and treasurers can take to ensure a long, successful partnership for the two parties. Start by clearly communicating your needs, bringing value beyond your account, and garnering trust by being honest.

See also:

• Enhancing Treasury Management When You Change Banks
• Trends in Bank Relationship Management

Scott Harrington is the CFO for Trovata, a software provider that bridges the gap between banks and accounting systems. Harrington brings more than 20 years of finance and accounting experience to Trovata, including financial leadership in high-growth publicly traded and privately held companies.