Millennials Impact On Banking

Did you know millennials outnumber baby boomers two to one? What’s more, their influence is growing quickly and their impact will change the way a public entity and higher ed institution will exchange currency.

Technology and virtual currency will develop over the next three to five years with ease, security, and transparency—a trend that we would never have conceived as baby boomers.

Credit cards are now tied to smartphones, and the use of transmittal bands or implanted chips will be the future aligned to virtual currency.

As a baby boomer I vowed only read my newspaper in paper form, never on the computer. But I find that today my main source of news is on digital media. And this month, I made my first purchase with the swipe of my new iWatch,using Apple Pay.

What’s happening to me? Well I guess the demands of the marketplace are having the same effect on me as they did to my parents, with the evolution of credit cards and cell phones.

The customers we serve today are changing. They look and handle money differently. My best advice is to listen to the millennials. They will have a greater impact on banking than we could ever have imagined—just like we did as baby boomers.

What’s Your Relationship Status?

The fact is, if many finance officials were asked how they would describe their banking relationship status today, they would respond with “it’s complicated.” Indeed, they’re correct—now more than ever.

What’s Your Relationship Status?

As we travel across the country providing solutions to public entities, municipalities, and higher education institutions, I’m stunned by how many finance officials are increasingly confused, unsure, and often even upset with their current banking relationship status. Recently, a client explained to me his sheer disappointment regarding his primary banking relationship. I asked him why he continued his current banking relationship; his response, well, was eye opening.

It’s important for the public sector to realize that banks are not their enemies. Likewise, it’s also important for banks to become more relationally accommodative to their public clients.

Our experience within banking and the public sector tells us that government clients (and the institutions they bank with) benefit greatly from a deep relationship with their banks. The individual I spoke with regarding the continuance of his entity’s current banking relationship explained to me that he hadn’t considered changing banks because they were just too entangled with his primary bank. This was odd considering this bank had sent him letters stating that he had 90 days to take his deposits elsewhere or his entity would be hit with numerous fees and monthly maintenance charges. In other words, his banking relationship status was somewhere between “it’s complicated” and “waiting for a miracle.”

Do you feel as if you and your bank are on the same team? Do you feel that the public entity you represent is truly better off because of your primary banking relationship? Many public entities do not.

As banks continue to adapt around the largest regulatory storm in the history of our country, the public sector faces limited liquidity returns and increased pressures by their banks to rapidly alter what they consider “normal practices.” Don’t let this scare you. As our blog posts have mentioned in the past, technology and regulations have complicated how banking services where historically offered and have completely changed how they’re going to be offered in the future.

So what’s the answer? We at three+one have extensively identified a number of proven ways to make your entity one that banks will welcome and in some cases fight for. As countless treasurers all over the United States are enduring frustrating overhauls in the way they bank, there are simple and easy solutions that solve numerous challenges you and your entity may face. There is no reason to have a conflicting relationship status with your bank(s). Our clients are consistently updating their banking relationship status and, in the process, increasing their returns and saving money. How has your banking relationship status changed overtime? Let us know.

The Tale of Two RFPs

If you have gone through the RFP process you know how challenging it can be.

It takes time, many people, time, lots of paper…

The Tale of Two RFPs

…and still more time.


RFPs are issued in effort to ensure quality services are provided, to be transparent and to maximize the value. But, one must ask,

Is this being accomplished in today’s banking upheaval?

Isn’t now the time to revamp the way the RFP process works?

Recently two public entities issued RFPs for banking services. In both cases the need was there. Looking at the results, however, suggests a new RFP process is needed. The old process just does not recognize the changing banking environment, new regulations, rapidly changing technology, and the diversity needed to maximize the value of every dollar available for deposit. So what were the results?

The big surprise is the poor response. The incumbent bank decided not to even answer for one entity, and the multiple bank responses turned into one or two satisfactory proposals, with no cost savings applying the same type of banking services that had been used for years.

In neither case was “out-of-the-box” thinking presented by the banks; the rigid RFP document and process just does not allow it. But, as the banking world is clearly changing, shouldn’t the RFP process change with it? If we continue to use the same recycled RFP and RFP process that has always been used, should we expect to get anything different?

Well we are. We’re getting banks hesitant to take on public deposits. A new RFP process is needed, one that still provides transparency, ensures quality services, and maximizes the real value of the public entity funds.

Communication and dialogue are the keys to success in this effort. At three+one we have created a simple three-page call for proposals. This format calls all interested banks into a kick-off meeting where you explain your current situation, your needs, and your desire to be an attractive customer to the banks (noting that banks are becoming picky and want to be in control of who they have relationships with). The kick-off meeting gives license to be creative as long as your needs are met, noting that simply replicating what you have currently is not likely to be a winning solution. Learn about new technology and how the new generation is transacting payments today. Responses are not to be 200-page proposals, but rather two-hour individual presentations from the banks.

What are the results? You will find that some of your banking fees will go down, some may stay the same, and some may go up if you stay with all current services.

You will save a lot of time, both the time taken to write a lengthy RFP and time needed to read each 200-page proposal that comes in. You will also find that you have established a well-rounded and long-lasting relationship and you are better preparedfor the banking of today and the future.

If you are in need of issuing an RFP or have any questions, please feel free to call us. We are always happy to help.

KYC- They Will Ask…

It really struck me … I got a note in the mail by my bank asking me to stop by my local branch so they could spend time and ask some questions, so they can complete a “Know Your Client” form. One week later, I received a formal letter making the same request.

KYC- They Will Ask...

I have been saying for over a year that the time would come, but it really hit home…they were asking me, (a public servant, business owner and former banker) after having been a customer for over 30 years, with weekly deposits and consistent withdraws.

In 2016 you can expect some letters and/or calls (up to four) by your banker(s) with the request to spend some time with you to answer some questions, that may be far reaching, but they do need to ask them.

As a public entity or higher Ed institution, you may be asked to answer more questions than you are use to. If you refuse to respond, then do not be surprised if your bank exits the relationship.

Please keep in mind that this is not the fault of your bank, but rather in response to new regulations coming out of Washington, D.C. In 2016 you will find your bank having to balance the needs of their clients while learning the new role of messenger and enforcer of Fed rules.

My advice to you, “do not wait for the call, but rather be prepared ahead of time with the information”.

If you need to know what your bank will ask, call three+one. We know the questions and have a stress free approach to addressing what your bank will need to know.