Is government banking conducted on a larger scale than traditional banking?
In this case, the two are very similar. Just as there are large corporations and small mom-and-pop companies in the private sector, there are small, quiet government entities as well as large, complex entities. Like traditional banking, the key is offering the same focused, hands-on service to all clients, no matter how big or small they may be.
What are the biggest differences between government banking and traditional banking?
When you work with a traditional company, it’s usually pretty straightforward. They sell widgets; they need accounts receivable and payable, payroll, check cashing and depositing, and things of that nature. You generally know what you’re getting into and what that client needs.
In government banking, it’s more about what the government entity is required to do, how it’s required to do it and when it’s required to do it. The accounting rules are different; the balance sheets are different.
You have to be mindful that a government entity is responsible for allocating its resources in the proper channels and evaluating its budget; government banking provides the products and services to help them do that.
Also, with accounting and auditing procedures, you have to be very responsive. Auditors, as required by state and federal statutes, will be closely watching those government entities, so you have to be responsive to those needs. When a government entity needs confirmation of collateralization or balance of interest rates, you need to have that information available in a timely fashion.
Are government entities more heavily regulated by state or federal authorities?
There is definitely more regulation from the state, so you always need to be mindful of any legislative changes occurring in your state. New laws that impact municipalities are passed every year, so you need to stay on top of that. Still, keep an eye on federal regulations as well. Particularly in this economic environment, you never know when a new piece of legislation will affect your city or state.
Logan Thibodeaux is a relationship manager and an industry specialist focusing on the government sector for Wells Fargo Bank. Reach him at (281) 652-4029 or [email protected].
