Many business owners get regular
medical or dental check-ups. Yet,
when it comes to evaluating their relationships with their banks and bankers
on a regular basis, they fail to do so.
Regular bank/banker evaluations on a
periodic basis are a must for business owners. After all, the right bank and banker are
essential in a company’s attempts to
achieve its business goals, and a lot can
happen to the company, the bank, and the
bankers in a year. Evolution and evaluation
go hand in hand, and companies that
embrace that principle can enhance their
profits and chances of success.
Smart Business discussed the benefits of
the annual evaluation with David Duxbury,
a group regional president with MB
Financial Bank. His insights will be of
value to business owners who may be
behind in their check-ups but who are
looking for ways to strengthen their companies’ well being.
Why is it important for companies to evaluate their relationships with banks and
bankers on an ongoing basis?
Primarily because companies evolve constantly. The banking industry is dynamic:
consolidation and personnel turnover are
constant within it. Therefore, it is important for companies to assess their ever-changing needs and how their banks and
bankers are meeting those needs.
It is significant to note that banks and
bankers are separate entities, so they must
be evaluated individually. In the process, a
company might discover that the banker
may be right for the company’s needs, but
the bank is not. Or vice versa. When that
happens, the company has to change one
or the other — or both — in its own best
interests.
How should companies evaluate banks?
One of the most important criteria is the
bank’s focus. Business owners should look
at where the bank directs its money, energy and resources. Does the bank have a
focus on business banking? If it does, at
what level? A bank that focuses exclusively on small businesses may not be the right
fit for middle- or large-market businesses,
and vice versa. A bank that claims to specialize in all sizes of business will be forced
to spread its limited resources over a wide
array of situations, which may not be beneficial to businesses in any market segment.
Another important consideration is the
bank’s commitment to customer service.
Are front-line people empowered to make
decisions? Are operational issues resolved
locally? A true commitment to superior
customer service will reduce errors and
the administrative burden on the company.
Additionally, business owners should
look for a bank that grants access to senior
management and other decision-makers
who can process requests quickly, act as
their advocates with loan committees, and
respond to their credit needs on a consistent basis.
What should companies be looking for in
their evaluations of their bankers?
One of the most significant is personal
attention. Companies want experienced
bankers who understand their operations
and financial goals, and who are familiar
with their key personnel.
Another important criterion is the level of
the banker’s commitment and interest in
the company. Is the banker truly interested
in how a company makes money? Is the
banker interested in knowing about
changes in the company’s industry? Does
the banker seem prepared to handle the
next problem or opportunity that may
arise?
The next area to address is the banker’s
decision-making skills. Can he or she make
a decision quickly and individually? A
banker must excel in all three areas in
order to effectively represent the company
within the bank.
A final factor is the banker’s ability to act
as a sounding board for the company. The
more experience a banker has, the more
likely he or she is able to help companies
deal with unique business situations.
Company personnel may never have experienced an expansion into foreign sales, for
example, but the banker may have worked
with other companies that have.
Is it more important to have the right banker
or the right bank?
The two go hand in hand, and business
owners have to have both. A company that
does not have the right banker is not going
to get access to the right people or the right
products in that bank. A banker can be the
greatest banker in the world, but if the
bank can’t deliver when opportunities
arise, such as expansion overseas or an
acquisition, then neither the bank nor the
banker can be of help to the company.
The combination of the right bank and
the right banker delivers a relationship
based on mutual benefit and a high level of
trust and personal commitment. Being able
to take advantage of opportunities is one of
the criteria that make periodic evaluations
so right and enhance the company’s
chances of success.
DAVID DUXBURY is a group regional president, commercial
banking, with MB Financial Bank. Reach him at (312) 948-1070
or [email protected].