Nearly two years ago, Wells Fargo
management asked Tim Kreitzer,
government banking manager, to form a specialty markets group that would
focus on government banking in the
Houston metropolitan area.
In 2005, the Houston region struggled to
earn the business of local government entities, winning about 5 percent of the business on which it bid through the request for
proposal (RFP) process.
“The approach was scattered and unfocused,” said Kreitzer. “We were trying to
win the business of customers that we didn’t know and who didn’t know us.”
Smart Business asked Kreitzer how
banks can make more customers aware of
the benefits of government banking.
How can banks get their message out to the
public concerning government banking?
When we decided to move in that direction, we focused on three strategies. First,
we partnered with other areas of the company. We looked at treasury management,
institutional brokerage and sales and others
as holding the key to our success. By establishing great working relationships with
product partners within the bank, we could
build deep, long-lasting relationships with
government entities. Next, we stayed active
in the community and partnered with other
team members active in their communities.
Finally, we emphasized Wells Fargo’s local
commitment that offered more responsive
service than the other large banks in town.
Our depth of experience and product support allows us to offer more than a small,
local competitor.
What should a bank do after establishing its
strategies?
Our first order of business was to hire a
relationship manager to work with me to
start a government banking office in
Houston. After talking with existing customers as well as government banking
managers in other states, we found it essential that the team members knew Wells
Fargo and it was especially helpful if they
had a treasury management background.
We brought in a former employee who
was working with a competitor after several years with Wells Fargo treasury management in Houston. The team decided that
this person’s background and desire to
build relationships would be a good fit.
And then we set out to build the Wells
Fargo brand within the government sector.
We identified all of the government entities
and started calling on them at their offices
and attending conferences that focused on
their needs. As we were doing this, we
began responding to RFPs that came to our
attention.
We have since added additional resources
in the form of human capital, including an
industry specialist and the team’s administrator, and real capital. We increased our
marketing budget to further enhance the
Wells Fargo brand throughout the local
government community.
We also started to network with internal
and external strategic contacts and partners. Internal partners included team members who worked with government customers in the state, including treasury management, institutional brokerage and sales,
public finance, corporate trust, merchant
services, institutional trust services and
community development and specialized
lending. External contacts included financial advisers and attorneys specializing in
the public sector.
What are some other keys to success?
The key to success is attention to detail,
knowing the industry and staying focused.
Government entities should look to work
with banks that have an established government banking program. Ask your bank if
it has a team that specifically manages government relationships. The uniqueness of
the industry requires this specialized focus.
One of the challenges of dealing with a
large organization is getting to the right person, so it is vital that you establish an effective government banking team in your
region.
Do you see much happening in 2009?
In 2009 there will be a plethora of activity
within the government sector. It should be
the busiest year since 2005 for depository
RFPs. In addition, there are many bond
issuances on tap since the economic slowdown has impacted the municipal bond
markets as well. There have been numerous headlines over the past few months
detailing tough economic times across the
country and the government sector is facing financial challenges as well.
Some states are facing serious budget
shortfalls, which in turn directly impacts
the counties, cities and school districts that
rely partially on state funds. Fortunately in
Texas, these problems are not as severe as
in other states, yet. However all signs are
pointing to a slowdown of the Texas economy and this could adversely impact our
customers. If revenue streams diminish or
turn negative, cities, counties and independent school districts (ISDs) will be looking towards other ways to fund budget
requirements. This could mean fewer government provided services, pay cuts, staff
reductions or new loan/line requests from
entities that never used traditional bank
lending before.
TIM KREITZER is government banking manager for Wells Fargo in Houston. Reach him at [email protected] or
(281) 652-4025.
