How to Approach a Bank Selection RFP: The ‘Do and Don’t’ Points

Corporations should not underestimate the planning needed to obtain a good request for proposal (RFP) result. An intense level of project management will be needed from both sides, the firm itself and the partner bank. Preparation is vital, and as such firms should not underestimate the need to clean up systems and documents internally first, before the journey really begins. Things done in haste will often go wrong, so sometimes pausing to assess the lay of the land is not a bad policy. However, care must also be taken to avoid ‘analysis paralysis’, and derailing a project by over-thinking it. 

It is vital for any corporate embarking on an RFP to be clear about the reasons for it, and what it is that they are trying to achieve. What are the objectives? Most RFPs have three central building blocks: 

  1. How best to achieve operational efficiencies. 
  2. How best to approach and improve overall risk management. 
  3. How to unlock inventory and receivables on their balance sheet. 

Within this context, early discussion really needs to be enterprise-wide. Not getting buy-in from all stakeholders from the beginning can ultimately lead to later conflicts, delaying the project. Often times the ‘not invented here’ set can get in the way, particularly where the corporation has joint ventures in the overall structure or has grown through acquisitions. A series of brainstorming and sharing experiences sessions both internally and with your partner bank, will help determine what your journey looks like, it will also help reveal any potential conflicts and obstacles. Discussion with a partner bank also ensures that they will work flexibly to meet your needs.

One vitally important question is working out who this partner bank should be? There are three key factors when choosing a bank: 

  1. Proof of concept: Make sure that your partner bank has provided its offered solution before and moreover, has done so successfully. This can be a good way to find out how the bank has implemented earlier projects.
  2. Implementation, implementation, implementation: Look at the bank’s record with past clients, and make sure you are aware of the difference between a good outcome and a great outcome. 
  3. Relationships: Find out how close a bank is to both the market infrastructure and regulators. The former, really understanding clients and their markets, becomes vital when a firm experiences the rare event of missing a market cut-off by a hair’s breadth. This is when a partner bank’s expertise becomes vital. The latter is particularly important in Asia where a lack of understanding with regulators can grind a project to a halt if a firm missteps. 

Beyond all of these functional requirements, it’s important to remember that above all a good partner bank is about the people. The bank may have all of the right technology and processes, but without the right people the long-term service will be poor. For this reason it’s important to go in and ‘kick the tires’ – get beyond the sales force and make sure to meet the people that really make the bank’s solutions tick. Talk to people across the network and make sure there is a sense of consistency in the strategy both at head office and in key locations. Involve your own staff and any subsidiaries too. 

The Growing Regional Segment: MNCs Entering Asia and Asian Firms Expanding

The standard ‘flavour’ of client that Standard Chartered has traditionally seen for RFPs has been Organisation for Economic Co-operation and Development (OECD)-headquartered companies that want to expand into the Asia region. This throws up the usual multinational corporation (MNC) treasury management problems, such as how best to finance its activities in Asia and how best to manage liquidity and risks in non-homogenous environments, as the firms seek to propel their growth. 

Increasingly, however, Asian regional powerhouses are setting up their own regional treasury centres (RTCs) in Asia or looking to expand themselves into other emerging markets. New business is now coming from a different ‘flavour’ of client – namely, regional corporates that are beginning to expand, either on an intra-Asian basis or into jurisdictions such as Africa and the Middle East. Many of the considerations are the same for both groups, but there are some key differences in terms of the experience curve. For many regional Asian players, this may be their first time dealing with RFPs, especially when dealing with unfamiliar markets and regulations. 

For a bank dealing with such clients there is a need to begin with a detailed diagnostic to give the client a full awareness of the different possibilities, whereas MNCs might already have a clear idea in mind of what they would like to do. However, this is not to say that the regional corporates are coming from a knowledge base of zero. Regional players are increasingly matching their OECD peers by hiring staff from MNCs to learn best practice. Likewise, regional players are increasingly turning to consultants. 

However, there are some key differences in the internal framework and processes that must be approached before approval. For example, such regional Asian companies are often still family businesses and different generations within the firm can have different levels of acceptance for change. There can also be greater concern or ‘fear factor’ about a perceived loss of control when entering new markets and employing unfamiliar technology, though these concerns can be solved. This makes it even more important to get full buy-in for a project to be executed smoothly. 

The markets regional players are entering, such as Africa and the Middle East, may not be the easiest to navigate but regional players are learning at an impressive rate and are rapidly coming up to speed, taking advantage of the most sophisticated systems. The journeys many of them are embarking on may well be challenging, but ultimately will be rewarding. 

Best Practice Do’s

  • In order to have a successful RFP there are a number of ‘do and don’t’ points that it is recommended to follow: 
  • Shortlist wisely. Have a chat with different banks to see what and where their expertise lies. 
  • Indicate a broad outline of the solution you are looking for, with the end vision you have.
  • Restrict the number of pages you want in the RFP to ensure that responses don’t get too long.
  • Highlight the key salient points of the RFP and indicate broadly the scoring criteria. 
  • Don’t hesitate to ask for information, and mention the nuances of your operations if your businesses are not standardised. 
  • Indicate the rationale behind the RFP, whether that is cost cutting, process integration, operational efficiency, re-engineering, etc. 
  • Provide a detailed timeline of the RFP process and make provisions for clarifications. 
  • Identify a senior project sponsor for the steering group to work with. 

Best Practice Don’ts  

  • Using the RFP for the purpose of a price reduction, which can be achieved through a request for information (RFI) or alternative benchmarking exercise.
  • Sending an RFP to too many banks as equal time should be given to various banks. 
  • Seeking a RFP for a region without sending details of each company’s operational flows. 
  • Aggressive timelines if you want a tailored solution. 




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