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.
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.