Treasury management Featured

7:00pm EDT December 26, 2007

Companies want things easier these days. Everybody is under a time crunch, and time, as they say, is money. That includes commercial banking clients, who more often are looking for a bank that can be a one-stop shop for all of their treasury management needs.

Those banks that succeed in treasury management are those who can combine technological innovation and expertise with highly personalized service, says Shawn Griffin, senior vice president of MB Financial Bank in Chicago. Banks that give their commercial clients the tools and attention they need and resolve their problems quickly are the ones who will stand out above the rest.

Smart Business spoke with Griffin about what companies can expect from treasury management services and how partnering with a good financial institution can facilitate their growth.

What is treasury management?

Treasury management is services offered by a bank to commercial customers that have four objectives: accelerating cash and information flow, controlling or slowing down disbursements, reporting information in real time, and offering numerous investment options for excess capital.

A good treasury management program has rich feature functionality within the core treasury information reporting system. It also features tight integration among all the various treasury systems and offers the flexibility to deliver individual customer value. All of the above must be supported by outstanding implementation, service delivery and operational support.

Commercial banking customers tend to want high-touch service. They want to be able to talk to people and have issues resolved at a one-stop shop where they can do Internet banking, ACH, lockbox or wire transfers. They want to talk to a single expert who can handle all of those issues. That’s where the servicing component has taken on more value than some of the more operational/transactional areas, which today tend to be viewed as commoditized.

Those customers should seek out a bank that has made the financial commitment and put dedicated experts in place to service them. There’s an added cost to supplying that level of service, so not all banks have done that. Many banks tend to just look at transaction processing and automated telephone and online channels. It’s really about people resolving unique problems in a timely manner, and that’s critical to commercial customers. Problems need to be fixed within minutes or hours versus days. Banks need to be staffed to resolve these issues on a same-day basis.

Where do banks fail in offering treasury management services?

First, it’s not the ‘least expensive’ — most banks won’t make the financial commitment in technology to excel in this area. Banks that want to be successful in the treasury management space need to not only have the sophisticated products necessary to deliver that service today but a product road map for the future. Those who invest in electronic delivery of certain products and services, such as remote deposit capture, and new product development around the ‘electronification’ of payments will be the ones who stay ahead of the curve.

Secondly, most banks fail because they decentralize the servicing to the operations area. There are dozens of different treasury management options, and banks who do a poor job in this department decentralize service to those silos. Clients are then left to navigate these multiple locations within a city or sometimes multiple states, which creates multiple touch points and inconsistent customer experiences. All issues really should be centralized to a single area with expert consultants who can resolve all those issues quickly and with a high degree of professionalism.

Is there a commercial client best suited to this service-oriented treasury management model?

The client who gets the most out of this model is the one who uses the most complex and greatest number of products and services. A sophisticated treasury customer who uses multiple services appreciates all of this. Banks who succeed with this model supply all those needs and create synergies with a client that occur from a single institution being a one-stop shop.

What about clients who are afraid to change from one bank to another?

Transitioning has a lot to do with product implementation paired with the treasury management process. A bank needs to have dedicated resources to facilitate that transition. Banks need to have a formal process in place that ensures that the customers’ needs have been met, that they understand the functionality of the products and that their staffs have been properly trained.

SHAWN GRIFFIN is senior vice president of MB Financial Bank in Chicago. Reach him at sgriffin@mbfinancial.com or (847) 653-1051.