ESSENCE OF GOOD BANK-CUSTOMER RELATIONSHIP
THE traditional Bank and customer relationship is perhaps one of the most treasured relationships by the bank. Banks take relationships with their clients so seriously to the extent that they will invest resources to create the relationship and to maintain it.
However, unfortunately sometimes it appears that after the relationship has been established, it may not be nurtured sufficiently for both parties to extract maximum benefits from the relationship.
In this article I discuss how you, as a customer of a bank, can gain the most value from having a close relationship with your bank, particularly as an individual or MSME business owner.
Beyond deposits and loans
A great many bank customers need a bank account in order to receive payments from their employers or clients. These transactional accounts are useful in that money is kept safe in the bank and one can withdraw it later at their convenience either by going to the bank or using other channels provided for accessing cash. However, it is important for all bank customers that the bank is not just a source of loans or merely a safe repository of your hard earned cash.
As a customer you should ask for a little bit more from the relationship with your bank. There are several ways in which you can extract the maximum value from your relationship with your bank, beyond just getting deposit or savings products and credit facilities. For this to happen you need to change the way you interact with your bank.
Establish an open communication line with your bank
Communication is the basis upon which any sound relationship between two or more people is built. The bank through its customer service channels and the client have a lot to gain from a sound communication platform. The first step therefore is to improve the level of communication between you and your bank. Banking is about trust. Your bank must trust you and you must trust your bank.
The relationship between a bank and its client begins when one walks into a bank typically to open a bank account. Throughout the banking relationship, from the account opening process, information will flow to the bank from the client and vice versa. Banks are careful that client information and communications from the bank to the client remain strictly confidential and privy only to the client concerned.
This is where rule number one in relationship building between a bank and its customers is based on a popular folk statement.
Don’t lie to your banker
Providing false or inaccurate information to your banker deliberately or otherwise will expose you as a dishonest customer. Your banker may not say when they found out that you gave in false information, but it will affect how he makes decisions that affect your relationship with the bank.
Ultimately, if your bank gets to know that you lied about certain things in your account opening forms or subsequently in your credit application, they may decline it entirely of if they grant you banking facilities they will treat you with suspicion for a long time. That is not a healthy relationship. So keep to the truths when engaging with your banker.
Ask questions
When entering into a relationship with your bank, ask, ask and ask again about any issue that may be unclear to you. This also helps you provide accurate information to your bank. Asking questions is a good habit. Don’t pretend to understand a product, when you’re not clear. Ask your banker to clearly state what your obligations under the product or service are as a client. Also ask how you will benefit from the product or service and most importantly be very clear what it will cost you to access the service or product.
This will limit misunderstandings between you and your bank in future. Don’t miss opportunities either. Also ask what else the bank has to offer you in terms of other products or services and what alternatives you have. You may be pleasantly surprised.
Cultivate a wider relationship with your banker
Whilst banks are in business to make money, they are also very good at advising their clients how they can save money and cut cost of doing business. Not surprisingly, your banker is the best placed person to advise you how to cut the costs of using bank services. Banking today goes far beyond the traditional role of providing deposit and loans facilities.
A good banker is involved with his client in all of the movements of his money and will provide guidance on how you as a client can get the best financial advantage so can you get the most return on your funds.
A good banker will save you money in service fees, help you to assess the credit-worthiness of your prospective customers and advise you on your own business’ health by analysing your cash flows, balance sheets, assets, receivables and payables.
Your banker should also be in a position to advise you on investment options available for your surplus funds. Bankers are also a good source of information on how you can manage personal savings, insurance and other financial safety nets that you and your MSME business need to have financial peace of mind.
It’s not just about the money
If you choose your banker carefully, you will get more than just a loan - you will get a strategic partner. But like any good relationship, it takes a lot of effort to keep things good. Treat your banker like any other valuable client or strategic vendor. The best banking relationships are based on pro-active communication. By establishing a pattern of regular communication - and not just when you need something - you build a relationship.