Talking to clients I have seen and heard the reluctance, dread and even fear at the thought of moving their business banking relationship from one provider to another. If you don’t understand what it involves, how much is taken care of for you and how many benefits there could be for you, then it is an understandable reaction.
Banks may be surprised (and I hope would care) about the number of people dissatisfied with their existing relationship, and the service levels and finance solutions that they are currently provided with.
With business banking we are not talking about someone interested in a £50 cash back incentive for moving their current account – the service and access to suitable finance solutions, all in a friction free way for the company, makes an enormous difference to their productivity, and in a lot of cases sanity!
As we hopefully continue to move away from the pandemic period, raw in businesses’ minds are the early days of Covid-19; 6 hours on hold to talk to ‘anyone’ at their bank – to get picked up and a ‘call back’ booked in for a few days later – which never materialised.
Those few days and beyond could well have been spent with their business closed, no money flowing in and not just themselves but staff to worry about and look after.
Ok, so the loan schemes came in, some businesses started to open back up and the rest we all know – but when they needed their bank the most, the bank was not accessible. This has left a big mark on many businesses.
There are some great Relationship Managers in business banking, who know their clients well and have worked with them in some cases for many years. But many decisions that affect their clients – limits, facilities or just support as a whole – are taken ‘above their pay grade’ by risk teams and committees not connected with the business.
In a time of wholesale changes in banks’ appetite and criteria for funding UK business, your Relationship Manager is no longer able in most cases to hold sway on many decisions that affect you.
I want to touch on a case study of a company that we helped to move their corporate banking relationship and some other areas that may be a catalyst for you to consider moving business banking.
We worked with a manufacturing client, and helped them to move their business banking from one high street group to another. The facilities moved over were:
- Core business banking
- Invoice Discounting facility
- Commercial owner-occupier mortgage
- A CBILS loan
With the benefit of hindsight the company suffered no defaults on their debtors book, but in the heat of the worst early months of the pandemic they did suffer late payments – but were in open and frequent dialogue with their clients about the situation.
Their incumbent bank operates a system driven ‘auto-adjustment’ so that if their day count for payment pushed over their 90 day limit, without any human intervention the system automatically reduced their pay rate on invoices by 1% for every day the day count was exceeded.
And so in May 2020, when their day count pushed 14 days over their limit, the system immediately reduced their pay rate on invoices to 76% from 90% – the day before payroll, and with no warning.
The MD funded the payroll 1 day late, but everyone got paid. The bank repaid the funds and lifted the pay rate back to 85% within a week – but understandably the damage was done. Is this the issue with reliance on tech-driven decision making and an account manager having 90-100 companies to look after?
The story ended well for the business, and they are now with a bank that works with clients on far reduced ratios of account managers to businesses, and talks to clients before any actions are agreed with them.
They did not raise any more funds by moving – but the banking now helps their business work better – even an improvement in bank portal and connectivity with accounts package has given them time back to get on with running the business.
What Benefits Could You Gain From Moving Business Bank?
A bank that listens: And this isn’t a shameless plug for the ‘listening bank’! Some clients are facing a wall of indifference to their current situation and path to recovery from Covid impact. ‘We are not a story book banker’ has been quoted to one client…
A bank that supports what you need: You may have a facility or type of finance that your bank just does not want to support post-Covid. A good example of this is Invoice Finance, and in several cases Invoice Finance for sectors like Construction and Project based work, where there is contractuality to client agreements.
Online access and connectivity that gives you time back: Anyone that runs a business can tell you that their most precious commodity is time – what could they do with more of it in terms of productivity and more time to run their business? The way that you business bank connects with you, offers you access to your finances and funding, and expects you to interact on issues likes monthly reconciliations can make a BIG difference to you as an owner or director of a company.
You ‘pivoted’ to trade out of Covid – but your bank hasn’t pivoted with you: Many businesses had to adapt, change or add completely new areas of business to get through and trade out of the pandemic – and so while your bank may have supported your previous activities, it doesn’t cover everything that you do now.
For example, you always used couriers but now you make so many deliveries that you need your own vans – but your bank doesn’t provide Asset Finance.
So, Where Do You Start?
All of the finance that we source is impartial and with no ties to any particular lender at all. The same is true of our ability to fit your business, your banking requirements and your aspirations moving forward with all of the facilities open to you with another bank to your existing business banking relationship.
Where do you start? With a conversation with us – to discuss what you have in place, what you are not getting that you want from your existing bank / what the problems are – and what you see your best outcome as looking like.
Because we know what is available from business banking providers, and how it can potentially be packaged for you, we then do the legwork and present options that are suitable. Leaving you to get on with the important job of running your business.
From our first conversation forwards, you will get the support and reassurance that you are not having to manage the process on your own – and that everyone is working to the same end goal – the best possible outcome for your business.
Your business may really benefit from a business banking move – why not invest a few minutes in a conversation with us today to discuss how?
Mark Grant, November 2021.