Choosing the right bank is critical in
today’s gloomy economic climate. As
credit markets tighten, it is more important than ever to have a banking partner who can provide the financial resources
necessary to grow your business.
Finding a new financial institution is not
a task that should be taken lightly, however. It is important to be thorough during the
vetting process.
“Get three reference names of a bank’s
current clients and call them to see how
the bank has been acting in these uncertain
times,” advises Joseph Yurosek, senior vice
president and regional group manager at
Comerica Bank. “Also, get references on
the individual at the bank that you would
be working with. These are the times that
you want to work with someone who has
been with the bank for years.”
Smart Business spoke with Yurosek
about selecting a bank in uncertain times,
how to make a seamless transition from
one financial institution to another and the
importance of communication.
How should a business go about selecting a
bank in uncertain times?
Business owners should make sure that
they are keeping up with current events.
They should spend time checking, probing
and asking questions so they can be prepared for issues that could possibly impact
their business. The days of ‘only relationships matter’ or ‘only pricing matters’ is
changing dramatically. In today’s environment, knowing that your bank will be
financially stable for the next two to five
years is extremely important. We service
the middle-market, and prospective clients
of ours should be doing all of the due diligence that they might not have done in the
past, even a year ago. Find out what the
bank’s business is, what its capital position
is, what its approval process is and get
names for references.
Why is it so important to look for a bank that
has a history of supporting its customers
through various business cycles?
You want to make sure that the way the
bank acts in good times is not dissimilar to
how they will act when the economic outlook is not clear. You should look for consistency with people, bank decisions and,
ultimately, a history of support, which
would allow you to navigate through your
own tougher times.
Once a selection has been made, what steps
can a business take to maximize the relationship with its bank?
Companies should be following up with
everything that was discussed during the
courting or selection process. We make
sure that we maximize our relationship
with the borrower when we complete the
courting stage and clients should do the
same thing. Clients should make sure that
the bank is following up on all of its promises, products and service levels that it indicated it could provide. Also, new clients
should take advantage of meeting the
bank’s senior executives. If I’m a client
today, I want to know who I’m dealing with
— in a business unit, in a credit function,
on a product function — so I can gain all of
the advantages that I need from the financial institution.
How can a company most effectively transition from one financial institution to another?
It is important to have someone who is
paying attention to all of the details. The
last thing you want to do — and I hear this
from CEOs and comptrollers all the time
— is go into a transition not having thought
everything through. This includes the timing where you start depositing checks into
your new account, the day you start writing checks against your existing account,
the day you start sending wires out on your
new bank account and the day you go into
your branch to make your first deposit. You
should spend time with the bank’s transition team and go through all of the logistics
in order to ensure a smooth transition.
How important a role does communication
play in sustaining a positive working relationship?
Communication plays a huge role. Any
successful client-bank relationship is
based on a partnership. The way to get the
most from your financial partner is to communicate your outlook, your needs and the
performance of your business — good, bad
or other. Sometimes customers don’t feel
like they should be communicating everything with us; they want to absorb it first. If
they provide information to us early on,
however, we can help them out earlier by
providing suggestions and ideas in an advisory role. Customers should take advantage of the fact that banks have multiple
clients, maybe in different industries,
maybe with different organizational structures, but who might have faced similar
issues. Banks can use the history they have
to advise customers in meeting their needs.
If the bank doesn’t know what’s going on,
it’s tougher for it to deliver that service.
JOSEPH YUROSEK is senior vice president and regional group manager at Comerica Bank. Reach him at (714) 435-3998 or
[email protected].
