The right bank, the right banker Featured

7:00pm EDT November 24, 2006

Many business owners get regular medical or dental check-ups. Yet, when it comes to evaluating their relationships with their banks and bankers on a regular basis, they fail to do so.

Regular bank/banker evaluations on a periodic basis are a must for business owners. After all, the right bank and banker are essential in a company’s attempts to achieve its business goals, and a lot can happen to the company, the bank, and the bankers in a year. Evolution and evaluation go hand in hand, and companies that embrace that principle can enhance their profits and chances of success.

Smart Business discussed the benefits of the annual evaluation with David Duxbury, a group regional president with MB Financial Bank. His insights will be of value to business owners who may be behind in their check-ups but who are looking for ways to strengthen their companies’ well being.

Why is it important for companies to evaluate their relationships with banks and bankers on an ongoing basis?

Primarily because companies evolve constantly. The banking industry is dynamic: consolidation and personnel turnover are constant within it. Therefore, it is important for companies to assess their ever-changing needs and how their banks and bankers are meeting those needs.

It is significant to note that banks and bankers are separate entities, so they must be evaluated individually. In the process, a company might discover that the banker may be right for the company’s needs, but the bank is not. Or vice versa. When that happens, the company has to change one or the other — or both — in its own best interests.

How should companies evaluate banks?

One of the most important criteria is the bank’s focus. Business owners should look at where the bank directs its money, energy and resources. Does the bank have a focus on business banking? If it does, at what level? A bank that focuses exclusively on small businesses may not be the right fit for middle- or large-market businesses, and vice versa. A bank that claims to specialize in all sizes of business will be forced to spread its limited resources over a wide array of situations, which may not be beneficial to businesses in any market segment.

Another important consideration is the bank’s commitment to customer service. Are front-line people empowered to make decisions? Are operational issues resolved locally? A true commitment to superior customer service will reduce errors and the administrative burden on the company.

Additionally, business owners should look for a bank that grants access to senior management and other decision-makers who can process requests quickly, act as their advocates with loan committees, and respond to their credit needs on a consistent basis.

What should companies be looking for in their evaluations of their bankers?

One of the most significant is personal attention. Companies want experienced bankers who understand their operations and financial goals, and who are familiar with their key personnel.

Another important criterion is the level of the banker’s commitment and interest in the company. Is the banker truly interested in how a company makes money? Is the banker interested in knowing about changes in the company’s industry? Does the banker seem prepared to handle the next problem or opportunity that may arise?

The next area to address is the banker’s decision-making skills. Can he or she make a decision quickly and individually? A banker must excel in all three areas in order to effectively represent the company within the bank.

A final factor is the banker’s ability to act as a sounding board for the company. The more experience a banker has, the more likely he or she is able to help companies deal with unique business situations. Company personnel may never have experienced an expansion into foreign sales, for example, but the banker may have worked with other companies that have.

Is it more important to have the right banker or the right bank?

The two go hand in hand, and business owners have to have both. A company that does not have the right banker is not going to get access to the right people or the right products in that bank. A banker can be the greatest banker in the world, but if the bank can’t deliver when opportunities arise, such as expansion overseas or an acquisition, then neither the bank nor the banker can be of help to the company.

The combination of the right bank and the right banker delivers a relationship based on mutual benefit and a high level of trust and personal commitment. Being able to take advantage of opportunities is one of the criteria that make periodic evaluations so right and enhance the company’s chances of success.

DAVID DUXBURY is a group regional president, commercial banking, with MB Financial Bank. Reach him at (312) 948-1070 or