Banka: Relationships with your bank
One of life’s necessities is a bank account.
Most of us, when we started working, were required to set up a bank account so that we could get paid. Some people were fortunate enough to have had parents or grandparents who set up a savings plan at birth.
The message that was always given is that you open a bank account and you build up a history with that bank so that when the time comes and you need to borrow funds, you have some history behind you and perhaps some trust and loyalty built up.
Where I grew up the lending application was always done by the branch manager and over the years things have evolved and we now have loans managers, personal financial managers, investment managers and small business managers.
So how do you pick a bank? In my experience I just went to the same bank that my parents went to. Then when I moved away, I needed to find a new bank because at that time there weren’t any ATM machines and you always needed to transfer your bank account to a branch that you were sure to deal with. I sort of miss that because then you get to know the people in the branch. Now I do most of my banking on-line and don’t have the same interaction. So my way of picking a bank was to pick the same bank of the company that I was working for at the time because then it made it easier to get direct deposit, because at that time also you could only deposit into an account at the same bank or branch.
Since the ATM machines became more popular there was less of a need to move bank accounts around and I have had my account in the same bank and branch since 1993, however, the branch is several miles away and I don’t do any actual banking there. When I worked at a bank, I can remember having to balance the ATM machines and what a nightmare that was because the machines just couldn’t handle all the different problems that came up and a lot of transactions got rejected. But of course now, after some 20 years in operation, all those bugs have been worked out.
The other thing that has changed in the banking system is the loans department. Most banks now centralize their lending. That means that the policies come from one main branch and are distributed to and carried out by the lending staff in the other branches. So if the main bank decides to implement a recessionary policy in Vancouver, the loan criteria and ranking classifications are set up for Vancouver businesses and may or may not be relevant for the business climate in Kelowna.
In order to get over that inequity, the banks have now implemented people to be account managers. There are personal account managers and small business account managers. The idea is that these managers will be familiar with the business climate and economical situation in the rural areas such as Kelowna and will present the loan and their recommendation to the head office for final approval.
So now we have sort of come full circle. Before, your financial future depended on one person—the bank manager and now it also depends on one person—the account manager.
As in every profession, there are good account managers and there are some not so good account managers. So it becomes very important to have a good relationship with your account manager.
What also happens is that staff in banks move around from position to position through the bank and eventually people will retire. So you may have had a good relationship with an account manager in the past, but now you may not be so pleased with the new one and it may be time for a change.
How do you know if it’s time for a change? Some indicators might be that when you ask a question, that the question is ignored; when you have asked the question several times and find that you are still not being understood; when you are told that you need to close up shop and go work for a ‘bigger firm’ in your industry or when you are told that you need to take your business to another bank or credit union.
How do you know if you have a great relationship with an account manager? Well pretty much the opposite of above. You are listened too and the account manager really appears to be working with you to solve your issues.
The loyalty that you have given your bank really means something. You receive referrals from your account manager. You receive a thank you from your account manager for people you have referred, or perhaps you are taken out for lunch.
Your account manager keeps you informed on a periodic basis of things that are coming up in the bank, such as new financing plans, or savings plans that may help your cash flow situation.
Gabriele Banka is a certified general accountant and the owner of Banka & Company Inc.