As we go down the path of trying to improve relationship banking delivery, we stumbled on the question - what does being a “relationship banker” mean? This seemingly simple question proved difficult to answer.
Tag: Relationship Banking
In our journey to finding out what “relationship banking” is all about, we explored the need to define what great customer service looks like (HERE) and highlighted the first rule of fanatical customer service.
In a recent blog (HERE), we discussed why now may be an inopportune time for banks to rely on a pay-for-risk banking model. In a pay-for-risk model, banks emphasize generating revenue by charging for risks that they take.
There is data and then there is the context around the data. Changing the context of the data changes the interpretation of that data. Context allows us to create signal from noise. If we tell you the average bank has one employee for every $5.9mm of assets, you likely would not care. However, if we tell you that bank performance and the assets-per-employee (APE) ratio are highly correlated and that the ratio is an accurate predictor of future performance, your curiosity is likely peaked.
As they say in banking – there is no bad pricing, just bad process. If your bank has ever complained about not winning a piece of banking business that it wanted, either two things occurred. One, your bank was an underdog from the start because you couldn’t deliver the products and services that the customer needed. Or, two, your bankers were not trained properly in the sales process. Price, or any other reason, for example, rarely comes into play for a successful bank.
While many banks say they are all about developing a relationship, few have an account structure to support that claim. Since deposit values are heating up, we thought we would take a look at what a commercial relationship banking package looks like and how you can use the package to drive fees, balances and profitability performance. Structured the right way, a commercial banking package does your heavy lifting for you. It speeds up the sales process, promotes cross-sell, retention and performance.
Let’s pick up where we left off in Part 2. In that post, we covered interest deductibility, provided a prioritized list of industries of where banks can make their largest impact based on profitability, and looked at how to advise companies with international operations. In this article, we wrap up the series by looking at how the new Tax Cut and Jobs Act of 2017 (TCJA) impacts net operating losses, tax impairments and different types of financing.
In Part 1, we discussed how the Tax Cut and Jobs Act of 2017 is the perfect medium to allow bankers to carry on a high quality, “Trusted Advisor” conversation with commercial clients. We covered how pricing will impact credit quality and loan pricing while highlighting the importance and method to have a conversation around deposits, balance timing, earnings and cash flow.
No matter your politics and no matter how you feel about the recently passed Tax Cut and Jobs Act of 2017 (TCJA), one thing is certain – the change has created confusion and anxiety across the households and businesses of America. As a result, the most significant tax overhaul since 1986 has created a near-perfect opportunity for banks to take a thought leadership position to speak with their clients as well as the media to promote the bank and its financial expertise.