The Customer is Always Right

At a recent meeting of The Financial Services Club (FSC), a gathering of senior executives and decision-makers from banks, insurance firms, technology companies and consultancies, the question posed to the corporate panel was: what do you expect from your bank? While there were specific requirements based on the business of each corporate panellist, there was overall consensus that efficient customer service and a real understanding of the client’s business was absolutely vital.

Customer Service is Key

“It is important to me that our partner banks really understand our business and know the individuals within our company,” said corporate panellist, Gary Sullivan, managing director of security and logistics specialists, Wilson James Ltd. “We don’t want banks to simply focus on transactional banking in terms of speed and efficiency, we also want relationship management. We need to know that our banks know us at a personal level and that it is not a faceless partnership.”

This opinion was supported by all of the corporate panellists including a group treasury manager at a UK-based multinational. “In the last 18 months, we have given one third of our FX business to one bank because they approached us with a sound understanding of our business and offered us something that we needed,” he said. “The banking relationship is very important, such as knowing the person you’re on the phone with at the bank’s side.”

The panellists also highlighted the fact that they found banks to be rigid in their approach to working with them. “Banks can be inflexible on products and ‘form filling”, claimed Sullivan at Wilson James. “What they should do is meet customers onsite to see how they operate in order to meet their specific business needs.”

This is good advice considering the fact that the bank-to-corporate relationship is no longer the permanent marriage it once was. The introduction of web-based technology and developments in bank-to-corporate connectivity, such as SWIFTNet for corporates and the move away from proprietary channels, means that corporate customers can switch banking partners much more easily than ever before. (Read more about the latest developments in connectivity between banks and corporates in What Do Corporate Treasurers Expect of Their Banks? by Vesa Kalliokoski, team manager, cash management at OpusCapita.)

“The banking sector has woken up to the fact that it has to be more commercial and reactive to market forces,” argued Michael J. Barley, director of group security at BSkyB, another panellist at the FSC meeting. “Corporate customers are more willing and, more importantly, able to shift their business relationships so banks can’t afford to be complacent and just wait for customers to knock at their door.”

How do the banks react to these criticisms? Of course, they agree that customer service is important but how do they actually meet this requirement in practice? Eric Mueller, head of country sales, Western Europe, cash management at Deutsche Bank, affirms that effective customer service is a top priority for corporate clients and is just as important as a trusted credit relationship with a bank. “We strongly believe that dedicated and personalised customer service makes a real difference,” he told gtnews. “Corporate clients expect to have one key service contact with clear back-up responsibilities for their daily operations, such as cash management, trade or FX/money market business, either on a local level for subsidiaries or on a central level for treasury centres and shared service centres.”

He acknowledges the fact that while the management of commercial banking transactions and flows between corporates and banks is increasingly managed automatically, electronically and fully integrated within end-to-end processes on both sides, clients prefer any daily issue or manual transaction to be managed by dedicated service managers. “Clients require experienced people on the ground with the tools and power to deal with their issues and who also speak the client’s language,” he said.

Banks recognise the value of high customer service but there seems to be a gap between what some banks are delivering and what the corporate market wants – how can this disconnect be resolved? “Fulfilling the expectations of corporate clients will not be an easy task for banks, especially at a time when there is little excess cash available for investment,” says Suzanne Hurt, vice president, banking and financial services at Bottomline Technologies in her article, The Changing Nature of Today’s Corporate-to-Bank Relationship. “It is investment in technology and new value-added service offerings, however, that will underpin developments within bank-to-corporate relationships, and banks must stride forward if they are to retain their client base and meet customer demand.” She argues that banks need to re-evaluate their strengths, weaknesses, markets and service offerings in order to determine how they will successfully meet the requirements of their clients.

In what areas, can banks provide more value to their corporate customers and what solutions should they be focusing on?

Where Can Banks Add Value?

According to Sanna Outa, COO at Exidio, the battle for lock-in and market share calls for a broader range of services that benefit the corporate customer in advanced ways while providing either direct or strategic business value to the bank. “The traditional corporate-to-bank interface is becoming more commoditised and the competition for clients calls for innovative solutions,” she argues in her article, B2T: Banks Thinking Outside the Box. “A smart player in this environment understands the broader scope of their target customer’s problems and looks for existing solutions to quickly solve those problems.”

Every corporate has its own specific challenges based on their organisation structure and business but there are a few common denominators such as pursuing a more effective cash management strategy or cash flow forecasting model. The corporate panellists at the FSC meeting highlighted their own expectations of the bank-to-corporate relationship and where they felt banks could do more.

For Barley at BSkyB, one significant area is fraud. “This is a growing industry concern, particularly identity theft. I want to know that if a bank holds my money it is being held securely and that it is not at risk from the threat of fraud,” he said. “The appropriate due diligence must be in place because we know that fraudsters will target those banks that have weaknesses in their data protection.”

Another issue the panellists discussed was how banks served small-and-medium sized corporates compared to the large multinationals. There was consensus that smaller corporates with smaller cash balances commanded less time from their banks. “Banks really need to pay attention to the SME market because it is this segment that is really driving the economy and we see a difference in attitude among banks when dealing with SMEs compared to large corporates,” said Sullivan at Wilson Jones.

This opinion was echoed by corporate panellist, Chris Robinson, managing director of Direct Response Limited, an SME that provides voice, data and contact centre services, who found that due to the size of his company and cash balance, banks were less likely to be proactive in terms of service offerings and guidance. In fact, due to their size, SMEs lack the resource and manpower to investigate and analyse the latest developments in connectivity and cash management and therefore rely more on their banks for information and advice than their larger corporate counterparts.

“The most frustrating part of our bank relationship is balancing our skill set with industry expertise,” said Robinson. “We need more education from our banks about what products are available and more guidance in terms of what we need to meet our business requirements.”

According to Mueller at Deutsche Bank what determines the intensity and frequency of service provided to companies is their size. “We do distinguish between solutions offered to SME and large corporates,” he explained. “Midcaps are looking for simple and cost-effective standardised solutions, while some large corporates are looking for customised global solutions.” He did point out that while the types of services offered might be different, the service level guidelines, dedicated personalised contacts or response times, etc. remain exactly the same for SMEs and large corporates.

The panellists also considered the bank-to-corporate relationship in the context of the credit crunch and agreed that banks had to do more to support their corporate clients in the current climate. “I think we have been mis-informed about the credit squeeze by our banks,” argued Sullivan at Wilson James. “They need to take a more positive attitude towards corporate clients who can prove the numbers on their balance sheets.”

This point returned to the original discussion about customer service and banks taking the time to understand their clients. The panellists agreed that if banks really understood their client’s business, they would trust them in difficult times and continue to provide the support and services they needed rather than taking hasty decisions to cut credit lines, for instance. An effective cash management and investment strategy is even more important as a result of the liquidity squeeze and corporates will look to their banks for support. “Corporates are extremely aware of the need to manage their cash flows much more effectively while credit margins have increased for some industries and some corporates, as well as some short-term funding instruments, such as commercial paper programmes, are hardly available anymore,” says Mueller at Deutsche Bank.

He argues that corporates need to implement an efficient and streamlined cash management set-up with fewer banks in order to combat the credit crunch. “There is a flight to quality and the continuing trend to consolidate the number of (credit) relationship banks globally that provide domestic as well as international cash management services is stronger than before,” he says. “Recent changes in the financial market have indeed accelerated the process of cash management centralisation and standardisation that has been ongoing for some years already.”

(Read about the single bank model versus the multiple bank model in the article by Peter Cunnigham, cash management, product sales consultant, EMEA at Citi, #gtnArticle(7232)#.)

Finally, the panel were asked whether their banks had spoken to them about the single euro payments area (SEPA) and what progress they had made in preparation for this initiative with their banks. Three of the corporate panellists said they had not made any plans for SEPA with one even saying he had no idea what SEPA was. Their response reflected one of the biggest obstacles to SEPA’s success – the fact that coporates, the ultimate end-users of the new SEPA instruments, have a lack of understanding and awareness about SEPA. This will be a priority for banks this year and one of the main focus points in their discussions with corporate clients. “Every corporate should undertake some level of impact analysis regarding SEPA – if they have not already done so this should be a priority in 2008. This is a discussion that corporates should have with their cash management banks,” says Andrew Reid, director, treasury solution team head (Northern Europe) at Deutsche Bank. “Each corporate must understand where the potential advantages are in terms of migrating to SEPA and the immediate advantages that result from the reduced cost of cross-border transfers.” Read more about how to prepare for SEPA in his article, Driving Forward Corporate Adoption of SEPA.


Corporates and banks agree that customer service is the number one component in a successful relationship. If banks are to retain clients and prevent churn then this has to be the key focus in all of their corporate relationships – regardless of the company’s size and cash balance. Corporates know what they want from their banks – a peronalised service that caters to their specific business needs as well as improved cash management tools – and they are voicing their concerns and frustrations. This information is readily available for banks to act on. Sullivan at Wilson James summed up his advice for banks succinctly when he concluded his thoughts at the panel by saying: “Banks need to use what they hear and change themselves.”


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