Partnering for Success: Is Your Bank a Strategic Business Ally?

Partnering for Success: Is Your Bank a Strategic Business Ally?  

Authors: 
Chris Hove, Senior Director, Commercial Banking
Betsy Vrba, Director, Commercial Payments Advisor

In today’s fast-paced environment, your bank has a role to play beyond providing traditional checking accounts and loans. With the volatile rate environment, economic uncertainty, bank failures, fraud at an all-time high and money moving faster than ever before, your bank should be guiding you with proactive communication to help you manage financial risks, improve efficiency and plan for the future.

Here are some key attributes you should expect from a valuable strategic banking partner.

Regular Consultations and Tailored Solutions

One of the first steps a bank should take to support your business’ financial success is to hold regular consultations with you, your management team and other critical stakeholders, as necessary. Why, you may ask? Because consistent communication ensures your banking team understands your goals as well as any challenges you face.

Building this level of understanding helps your banking team identify areas of risk and operational inefficiencies within your business, and, in turn, recommend solutions for optimizing cash and streamlining payments.

Embracing Technology and Ensuring Security

Technology is evolving at an astonishing rate. While embracing tech advancements can be a hard change, you don’t want your business to fall behind on innovative solutions that can help make your business more efficient and secure.

Today, consumers and businesses can move money faster than ever before through a variety banking tools and fintech solutions. This comes with both benefit and risk for all parties, and it’s critical that your bank educates you on the benefits and risks associated with each payment channel. Conversations around dual control, fraud protection, and the pros and cons of certain payment types are important conversations to have with your banker.

Furthermore, your banker needs to be knowledgeable about new payment technology that can improve efficiency or save you money. Products such as virtual card can help with efficiency and security.

These conversations can help strengthen your business while also safeguarding your funds.

Talking About FDIC Insurance

FDIC insurance limits for business accounts is $250,000 accumulative across all your deposit accounts at a banking institution, per Tax ID. This includes checking, savings and certificate of deposit accounts under the same Tax ID.

If your business account balances exceed $250,000, those excess funds may not be insured.

To mitigate risk, your bank should talk to you about solutions to protect business account balances that extend beyond established FDIC insurance limits.

Navigating a Volatile Rate Environment

In a high-rate environment, strategies to optimize your cash position become vital. The rising interest rates in recent years have generated a favorable deposit environment, and, at the same time, an unfavorable lending environment.

If you’re in a net cash position, as rates rise, your bank should be proactively talking to you about investment strategies to help maximize your rate of return. If you’re in a net borrowing position, your bank should be having conversations with you on how to maximize daily cash to pay down your line of credit each day.

A strategic banking partner can suggest payment strategies and other measures to help your money work as hard as it can for your business. Whether rates are trending up or down, your bank should help you manage each situation effectively.

Securing the Advantage of Global Markets

Competing abroad can boost your business by opening doors to new and lucrative markets. However, international trade is complex. Businesses need to consider current geopolitical tensions, regulatory compliance and proper currency management before entering the global arena.

To manage the fundamentals, you need a bank with expertise in international trade. Your bank should be proficient in payment solutions and hedging risk and be able to offer the proper instruments to meet your needs. You should also be able to look to your bank for advice about different markets and whether your current operation is ready to invest outside local or national boundaries.

The Human Touch: Your Bank's Greatest Asset

While advanced features and services are important, the biggest asset of any bank is its people. Local representatives who understand your market and the unique challenges you face are critical to supporting your business objectives.

If you’re a manufacturing operation in the Midwest, bank representatives in New York City won’t be as knowledgeable about the challenges your company faces or the subtleties of your market. A local presence with experience in your industry is vital to receiving the type of personalized service you need from a strategic partner.   

Your bank should take the time to develop a strong relationship with your business and work to uncover the full range of options and opportunities available to you. In the end, a bank that’s dedicated to taking care of your business will offer both the technological tools and human support needed to thrive.

If you are looking for a bank with these attributes that is ready to become a integral, strategic partner in your business, we invite you to learn more about FNBO.

About the Authors

With more than 30 years of banking experience, Chris provides a steady hand and experienced insights to help his customers improve their financial lives and reach their goals.

As a Director for the Commercial Payments division, Betsy proudly supports businesses across FNBO communities with treasury and payment expertise.