BANKING & FINANCE: 5 questions to ask about your banking relationship
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BANKING & FINANCE: 5 questions to ask about your banking relationship THE FACT IS, MOST PEOPLE DONT REALLY THINK ABOUT HAVING A RELATIONSHIP WITH THEIR BANK. Monday, June 25, 2007
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A lot of people think of their bank as an appliance: They want it to be there
when they need it but otherwise sit quietly on the countertop, out of the
way. Conversely, a lot of banks think of their customers as dairy cows: They
want them to come into the barn frequently to deliver their latest production,
but otherwise stay out in the pasture, making more milk.
The fact is, most people dont really think about having a relationship with
their bank, and most banks dont really want to have a relationship with
their customers. Relationships, in banking as in life, take work. Work takes
time and time is money. Thats why a couple of years ago the CEO of ING
Direct famously announced that any customer who telephoned the help desk
more than twice a month would be fired. The way you were supposed to interact
with an online bank was online. If you had to call for help all the time
and each call, he reckoned, cost the company $12 the bank would soon
eat up its already thin margins and simply could not afford to stay in business.
So given these circumstances, here are five quick questions you should ask
yourself about your own banking relationship:
1. Do I really need a relationship?
Yes. Despite the fact that you dont think you want or need one, you really
should form a banking relationship. In the early days, bankers did business
with people they knew. They kept the cow behind the bank as collateral for
the farmers loan. Thats still true today, except for the cow part. The
more your bank knows about you, your life and your business, the better it
can be at delivering the level of service you really need and deserve.
2. How do I start one?
Walk into a bank and tell them you want to start a relationship and see
how they react. If they look at you like you just rolled in from the 19th
century, go to another bank. Your bank should be your business partner, and
you should find one that fits you, your personality, your vision and your
business model.
3. What should I expect to get out of it?
Service. Support. Suggestions. Decisions. Action. Your bank should be there
when you need it yes, like an appliance but it should also be there working
for you even when you dont need it. Your bank should be on the lookout for
new opportunities, should monitor your business and your accounts and should
always be looking for better ways to help you manage your money, your life
and your business.
4. What should I expect to have to put into it?
Commitment. Honesty. Deposits. Banks make loans based on deposits; the more
deposits it holds, the more loans it can make. So the more deposits you invest
in your bank, the more loans your bank can re-invest in the futures of your
business and others in your community. This is what good relationships are
based upon: reciprocity. It puts you and your bank on a win-win basis.
5. Will I have as good a relationship with a local community bank as
a big national one?
Not all banks are right for all people. You really owe it to yourself to
shop around, interview various banks and ask some tough questions. Its your
money and your business. Community banks offer most of the same products
as national banks, but they probably pay more attention to smaller businesses
and offer a higher level of service. Either way, your money is insured by
the Federal Deposit Insurance Corporation. All deposits in all banks are
subject to the same rules and limits. And certain banks, like Circle Bank,
have a program that can provide FDIC coverage for up to $30 million.
In the end, its simple: Your bank should be your partner. It should respect
who you are and what you want to accomplish, and then it should support you
in realizing your dreams, providing the financial tools you need and the
financial expertise to apply those tools effectively. At Circle Bank, were
as selective in choosing our clients as we assume our clients are in choosing
us. We know that our success is only a result of our clients success. And
we work as hard at helping them achieve that success as they do. And that,
we think, is what a true banking relationship should be.
Carleton Prince is senior vice president of Circle Bank, with branches
in Santa Rosa, Peta-luma, Novato and San Rafael .
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