Bank relationship strategy and management


bank relationship strategy and management

The main objective of bank relationship management is to ensure access to help them define the best strategy for optimising cash management in emerging or. Bank Relationship Management: The importance of being a pro-active a key element of medium treasury risk strategy, which can impact the. Strategic Management in Banking programme enhances key bank-specific management skills whilst exploring topics including Asset and Liability Management.

bank relationship strategy and management

This allows us to find an appropriate lender and meet your financial needs quickly. Banks and other financial institutions often set clear standards for acceptable risk profiles of lending candidates.

The importance of bank relationship management for treasurers

Our experts understand these standards and use them to match your business with the right lending institution. This also allows us to design financial packages that address the needs of the lending institution.

Get Started Operations Management Efficient operations are the key to success for any business, but they can also be used to improve your financial services.

Diligentiam employs a network of banking professionals with vast experience in the financial services industry. Our consultants work with your business to find areas that will improve your lending profile. We analyze your business credit profile to identify and address any problem areas. We review your operations and make recommendations for maximizing efficiency, thus improving your profitability and reducing your lending risk. We conduct risk assessments to mitigate any potential losses.

We review and analyze your business collateral to maximize its positive impact on your financial portfolio.

In today's developments, customers are the key assets for an organization, and customer relationship management is equally critical for organizations [ 4 ]. Customer Relationship Management CRM from a financial institution perspective is a sound strategy to identify clients and the bank's most lucrative prospects and takes time and attention to expanding account relationships with those clients through individualized marketing, repricing, decision making - discretionary and customized service - all offered through various sales channels used by the bank.

bank relationship strategy and management

The overall success of the organization depends on customer satisfaction and customer satisfaction cannot be achieved without being managed Relationships with clients [ 4 ]. CRM aims to coordinate all customer-related business processes and includes collecting, comparing, and interpreting customer data to determine purchasing behavior models that can be used to support effective marketing programs [ 5 ].

Being competitive and the products are easily copiable, many companies banks are trying to gain a foothold over the competition through customer relationship management policies.

Business strategy - SWOT analysis

In this situation, consumer behavior is volatile as they have a wider choice of products that are often less distinct and they are much more informed. For many bids, the balance of power moves toward the customer that raises their expectations of how companies should look after them [ 3 ].

The tendency to develop a strong relationship between customers and a company can prove to be an important opportunity for competitive advantage. CRM has focused on assessing critical dimensions of satisfaction and defining customer groups with preference and distinctive expectations in the private sector of banks [ 6 ]. CRM helps companies improve their profitability with their clients while at the same time making interactions seem friendly through individualization. Customer Relationship Management CRM is therefore evolving and involves interaction between the organization and its clients normally referring to a customer.

CRM can also mean holding or raising the client base of the company as managers can now walk by talking to clients [ 7 ] Figure 1. Even fewer service providers may be available on a regional or international level. Similarly, mergers within the financial industry lead to a certain degree of harmonisation of products and services. Regulations In connection with globalisation, corporates are increasingly looking to their banks for support regarding local laws and regulations to help them define the best strategy for optimising cash management in emerging or established markets SEPA is the obvious example.

While this has to be achieved through better internal controls and information systems, it may also require a higher degree of information quality from banks.

This reduces the complexity of having to manage multiple banking interfaces, formats and processes and in principle makes it easier to switch banks. Services or solutions As a result, corporates have gained an advantage in their banking relationships over time and can demand innovative and improved products and services to support their treasury, cash and liquidity management activities.

Banks also have to respond to corporate demand for bespoke solutions to suit their particular situation. This makes it more difficult to offer products and services individually on a one-size-fits-all basis. Services that in the past were offered by completely different banking departments eg cash management and trade finance are increasingly offered together. Banks have to find ways of compensating for this loss in revenue by offering new solutions that add value to a corporate.

bank relationship strategy and management

Bank creditworthiness Since the credit crisis and the failure of some financial institutions, the creditworthiness of banks has been a major concern for treasurers and cash managers. Companies that used to concentrate funds with a single bank are now more inclined to spread business across several banks to distribute the risk.

How corporates view bank relationships Depending on their size, businesses may view bank relationships in different ways.

Banking Relationship Management

Cash rich companies may regard their banks as suppliers of specific services and banking technology, rather than a core relationship. For these companies, the complexity of maintaining bank relationships across various service segments in different regions nonetheless requires a considerable degree of management to minimise any risk that could affect the company in terms of service provision, cost or the safety of cash deposits.

For this type of company the relationship with a bank is mostly driven by cost factors and banking fees. Services such as cash management are considered a commodity and price is the real differentiating factor between banks.

Other companies may see bank relationship management from a wider perspective, taking into account other variables such as customer service and support, the breadth of the product and service offering and the advisory role that banks can play, for example in the management of the financial supply chain.

Weighing up the options As there is a growing similarity in the products, services and pricing offered by banks, corporates have to compare banks on the basis of their service quality and ability to manage the relationship with their corporate customer effectively. In fact, the bank relationship becomes more of a partnership, which is the result of a stronger commitment by the bank to provide credit facilities, deliver products and services and continue to develop these services in the future.

The commitment is reflected by the expenditure on the side of the corporate and a desire to select a banking partner for the long term.