The bank selection process has evolved over the last years for different reasons. It is key to properly select your bank partners. The technology has become a key criterion for a good bank relationship. Today, it is even more crucial to include the technology requirements in the bank RFP’s in order to determine the right partners for the future. It is not an easy process…


"It is also sane and sound nancially speaking to challenge banks on a regular basis to also give opportunities to other bank partners to pitch if they can/want."


Reasons for changing bank relationships


It is a mix of different factors. In a RFP and beauty contest, the balance score card pre-defined weight the different parts according to the importance for the customer/treasurer. Price is obviously a key factor. It is also sane and sound financially speaking to challenge banks on a regular basis to also give opportunities to other bank partners to pitch if they can/ want. The technology criterion becomes more and more crucial in the selection in order to ensure the bank connectivity. Are they able to offer eBAM? To prepare and issue cheques? To offer virtual accounts? What about their network? Etc… The service is also still important and eventually do not forget the personal factor. It remains an intuitu personae relationship between individual. Human factor is still there at a time we all talk about robots.


The hurdles and challenges for changing bank relationships It is challenging.


Every change is always challenging as it is always tough at inception and requires a lot of efforts from both sides to adapt and to get things adjusted. However, the idea remains to get better situation and costs afterwards. It is a sort of compulsory / obliged path prior to cheaper and better relationship. The major hurdle is the resistance to changes. We are all lazy and changes will automatically mean problems at the beginning. That’s the human treasurer’s nature… Please also note that KYC’s and other compliance documentation are a real issue. I do recommend prior to select a new bank (if you don’t have accounts opened) to open the account first or to check KYC first before on-boarding.


Best ways to minimise disruption when changing banks


The best way to minimise disruption is to prepare the ground and the people. Do not neglect the affiliates’ whom should be involved too in order to make sure they are on-boarded and “bought” the project. It is not that obvious in practice. Talk to your affiliates before to make sure they validate your choices or even better your recommendation. Give them the opportunity to participate to the selection process as far as you can.


Tips for a successful bank RFP process


First try to be comprehensive, clear and fair to avoid overexpectations from your bank partners. Be fair by regularly challenging them and offering them opportunities to pitch. Next time, they’ll may be more successful. I would also recommend to try to understand and anticipate bank strategies which can vary and evolve over time. We recently saw some banks withdrawing from some countries, business or products. Look also for ideas, innovations and proactivity. Be fair with the one coming with the idea! You should also consider new methods of payment and technologies which now count a lot for good bank relationships. A RFP should be a real one with the idea of giving the business to the one who deserved it and made the best offer. Do try to launch RFP’s with the idea of getting discount from your current partner. A fake RFP is not to be recommended. Be as fair as you’d like your partners to be!


"Talk to your a†liates before to make sure they validate your choices or even better your recommendation."


How to make the process easier for treasury?


A well-prepared and comprehensive RFI//RFP is the preliminary step for a successful change in BAM. They can anticipate resources needed from the Corp side and be overcautious. They should also be conservative in terms of planning for the implementation. Let’s keep in mind the 5 p’s British army principles: Proper Preparation Prevents Poor Performance. RFP’s aren’t, in general, enough detailed and the technical requirements seldom enough developed. It means that the risk is to get uncomplete answers and to be surprised at implementation if the bank is not able to deliver the specifications defined. You will never be too detailed in such exercise. You’ll be very often too vague and not sufficiently precise. Ask for tests and references. Check whether the bank is on SWIFT MyStandard, for example. Require example of MT 940 to check whether you will be able to automatically reconcile operations. You should never forget that a RFP is also a way to gauge bank ability to deliver, to innovate and to serve its customers. The quality of the answers is a key factor when selecting the bank.


Are banks really improving their on boarding processes?


Yes, they try to do better. The difficulty resides in the fact they do not have a dedicated technical person in charge to coordinate the process of implementing a solution. They have multiple resources (in general) and no one to coordinate them properly. Let’s take the example of SWIFT MyStandard which help pre-testing. Is the bank ready to be on KYC register like SWIFT, Thomson-Reuters or If so it illustrates their will to smooth on boarding processes. The ISDA validation process is always a good way to test the water and to check whether the bank will be open-minded and business-oriented or inflexible. Ask always for references and call them to check whether they were satisfy by services and promises. The best way of success is linked to people. Have access to the right one(s) and get strong support from your GRM (i.e. Global Relationship Manager) to make sure they’ll deliver. They try to enhance proposal given hard competition. The success factor is often to identify within their organization who is “the” contact person for specific issues, like technical ones with SWIFT and bank connectivity. Banks are huge organizations and if you don’t find the right person and a good coordinator, you can be lost and the project bogged down.


Piece of advice for any treasurer thinking about changing relationship banks


RFP’s or at least RFI’s and then beauty contests are tools to properly select bank partners and to give a chance to competition. You will never be enough detailed in your RFP and will never get 100% comfort proposal and commitments will be implemented perfectly. And even if comprehensive as well as bank answers and proposal, you will still depend on quality of service(s). It is never guaranteed, unfortunately. The service remains a human issue at a time we all talk about Artificial Intelligence. Isn’t it a sort of paradox?


"Let’s keep in mind the 5 p’s British army principles: Proper Preparation Prevents Poor Performance."


François Masquelier, Chairman ATEL