Did you know the average cost of issuing and awarding a Request for Proposal (RFP) for banking services, using internal resources, is… $45,000?
At that cost, the RFP better be worth it!
In many instances, that’s not the case. What we tend to find are 2016 banking-services RFPs are often trapped in a 1990s template.
Recently, I reviewed a large national banking RFP that had the same wording of ones I’d seen many years ago. In fact, it was a replica of another such organization’s RFP that had been issued several years before. It lacked color, specifics, and data and was serving as a set up for a price war between banks. The real problem is that very few banks will respond to it. The end result will be a ton of money spent with no significant outcome to warrant the expense.
If you are planning to issue a banking RFP, consider the following:
(1) Conduct a liquidity/ banking analysis first that will assess all your organization’s needs, now and well into the future. The more information you can provide competing banks, the more they have to work with in providing a better response.
(2) Create a new RFP format that is fresh, forward thinking, and flexible, making it clear you will consider new ideas.
(3) Limit responses to fewer words and have more in-person conversations. We’ve found paper is not always the best way to determine the right fit.
(4) Address your cash and lending needs both now and in the future; provide a holistic picture. Given new federal regulations, many banks have not been responding to RFPs due to their lack of interest in holding such deposits.
(5) if you hire a consultant to prepare your RFP, make sure you’re not getting a rehash of some other client’s template. Make them do original brainstorming on your RFP and be accountable for the results.
If you decide to issue a banking-services RFP, do it right or else you will be just sending out expensive sheets of paper that will provide little value to your organization or to the banks you want to compete for your business.
If you don’t know where to start or need a fresh perspective, call us. At three+one, we help entities of all sizes evaluate their needs and determine if a banking RFP is right for them. If you’re interested, we can tailor an RFP document for you that is easy to read, reflects and articulates your needs, and is written to get more responses. Our goal is to make the paper your RFP is printed on an asset and not an unnecessary expense.
We Hope to See You at our Upcoming Presentation:
GFOA of SC – October 16 – 19 (We’ll be presenting twice!)
North Country NY GFOA – October 20th