Small Business Relationship Managers Not Delivering Value, Finds Report

The role of relationship managers across Europe comes into question with the release of the fourth annual European Financial Management and Marketing Association (Efma)-Finalta report on small business banking in Europe. In the budget constrained environment of 2010, the report challenges the costly provision of the small business relationship manager (RM) and asks is there a need for this role?

The report outlines strong reasons why banks should critically review how they are using small business RMs and whether real value is being generated.

Approximately 50% of small business customers are relationship managed across Europe. Finalta looked at RM time-spend and believes too much time is spent disguising poor lending processes and other business inefficiencies from the customer. Further, RMs carry out low-value activities, instead of working on deepening relationships with existing customers, acquiring profitable switchers and exploring the personal aspects of the customer’s needs.

The report predicts over the next few years, successful banks will redefine their service models to develop a clear definition of the role and purpose of RMs and invest in fixing poor processes. While the RM is not dead, there are likely to be significantly fewer in five years time.

Russell Shore, director of Finalta, said: “Thousands of relationship managers are employed across Europe at significant cost. Yet, too often, they are covering up poor processes or compensating for bad customer experiences.While Finalta does not believe we are seeing the end of the role of the relationship manager, there is certainly a need for a more critical examination of the purpose and use of the RM than in the previous decade. For the relationship manager to survive long term, they must add value both to the customer and to the bank.”

Ninety banks took part in this research, representing 27 countries and 16 million small business customers. Respondents were small and medium-sized enterprise (SME) segment heads or equivalent.


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