Small Initiatives

As banks and credit unions seek alternative income sources, their focus shifts significantly to business services. Fee income sources from consumer banking appear to be limited
to courtesy pay privilege or overdraft privilege fees, ATM charges and
NSF charges (others may deserve mention but let's simplify for now).

Deposits are at the heart of any business relationship so most financial institutions have a product base on
which to build. Since these relationships represent the initial contact
for the bank or credit union, I'll offer a few reminders but stand by
my belief that ancillary products and lending services offer the best
opportunities to grow the business services channel. I prefer to leave portfolio risk management to the
CFOs, CPAs and credit committees, and look instead at opportunities
missed in sales, technology and marketing strategies.

My People, Process and Technology analysis yields ideas and opportunities to gain business from your business customers while attracting and retaining valuable human resources.

People reality

I hope there is no need to emphasize the importance of hiring
experienced people or educating to grow relevant experience. I've been
in a few financial institutions where a branch manager or senior loan
officer has been shuffled into the position of business banker/commercial lender without any training, education or skill set
-- just because customers "know them" or they've been a loan officer
longer than the average employee at the financial institution.

Business customers have unique needs. Cash flows are as different as the services they offer. Business
checking and savings products most often requested are online access
(remote management included), automated transfer and ACH options, debit
cards, credit cards, payroll management, lines of credit, Sweep
options, group banking benefits for employees and dedicated call
queues. Did I mention the need for someone to explain the analysis
statement? Talking to customers intelligently about a loan request to
finance receivables or cash flow slow sales months is completely
opposite of decisioning an auto loan for a consumer. Inexperienced
bankers/lenders can create a credibility crack that widens with every
mistake.

So hire right. Educate right. Don't skimp on new resources if you're starting a new business channel. Business bankers/lenders or third party providers cost money. Invest
appropriately and you'll see results. Invest poorly and you'll see a
rate of return that reflects your commitment.

Recruitment sites (NBFSN is one example) reveal that commercial lenders and business bankers are a commodity in today's business
financial realm. Community banks are in a feeding frenzy among the pool
of experienced lenders and bankers within their territorial boundaries.
Never have the Rolodex size and networking skills been more critical
than in this arena. Hiring banks realize the dollar potential these
individuals represent. Credit unions are just beginning to dip toes
into commercial lending and business
banking waters and will soon join the fray. Side note: Up until now
most credit unions providing commercial loans outsourced expertise to
strategic business partners like Newtek Business Services, Inc. or credit union service organizations (CUSO) such as Credit Union Business Capital, LLC and Members Business Services.
These companies partake in culling commercial lenders and bankers from
the industry pool and add to the ebb and flow among institutions.

As you ponder direction for business services or select candidates from the deepening pool here are a few ideas to keep in mind.

• People Reality Check #1: Establish an efficient organizational structure for the business product vertical. Do you want deposit products handled by the branches and lending by lending personnel? Do you want all business products handled through the business banker? How does this fit within your business development plan for both branches and business banking? Special note: If you're using a third party vendor to work business loan applications, make sure employees receive thorough training via
  on-site sessions, Webinars, and collateral. Everyone should know when
  to call, who to call and what to have for the call. Your vendor should establish response standards and follow-up protocols for the customer and you.
• People Reality Check #2: I suggest conducting skills assessment for any new individual being considered for a business banker position (actually, I suggest skills assessment testing for anyone considered for a position within your organization). Check out MAPP or Profiles International. Once training is completed, include testing to benchmark product knowledge. If you are relying on your own training resources or department make sure they understand business banking products and how to sell the right product to the customer.
  Trainers should also explain the organizational and contact flow for business products.
• People Reality Check #3: Define accountability for your employees. Establish communication standards internally and establish dedicated call queues or phone numbers for business customers. More importantly, define goals. Every employee should
  already understand and acknowledge retail growth goals for consumer
  banking. If you're investing in and expecting business services to represent a large percentage of overall goals for the financial institution, every employee should understand that fact.
• People Reality Check #4: Make sure your IT department understands business
  solutions and their impact to the organization. Their commitment is
  critical to ensuring systems function as expected and any issues are
  dealt with promptly.

Technology Reality

Consider this fact:
Over 700,000 new businesses were started in 2006. Of that number
585,000 closed or declared bankruptcy leaving 115,000 open for business, at least for 2006. Competition for business accounts continues to mount as does the hunt for the right commercial portfolio manager and business banker. Armed with this information, I became curious how financial institutions were promoting their business solutions and making it easy for customers to say yes to services. Business accounts represent significant growth potential and business
bankers/lenders are highly sought positions tagged with higher
compensation needs and bonuses based upon portfolio size and
acquisition. I would expect most financial institutions to promote
these services, bankers and areas of expertise to customers, right? And
wouldn't most of these individuals want the advertisement? Apparently
not.

Web sites revealed an overabundance of categorical information for account types, services, miscellaneous business products, and locations but none I came across offered lender or banker profiles or areas of expertise. BB&T Asset Management
was the closest example to what I was looking for but the information
was limited to asset management teams. Somehow, somewhere, commercial
lenders, business bankers and business solutions need to be introduced. Technology solutions today allow this to be a reality.

Here are a few suggestions to try.

• Tech Reality Check #1: Set up a link under the Business Services page of your Web site with a picture and brief bio of each banker/lender. Be sure to include office address and contact information. Phishing is a concern so I would be hesitant to list e-mail addresses unless your entire site is on a secured server with processes in place to help identify and limit fraudulent activities. Defer to your IT department or hosting provider for a decision.
• Tech Reality Check #2: Consider developing a Web contact form (look at ours as an example) that allows potential customers to reach your business bankers based upon area of expertise or need. Each category can be
  directed to a particular individual or group. This method completely
  hides staff e-mail addresses from end-users, which helps hold down spam.
• Tech Reality Check #3: Introduce your bankers through Webinars specific to business owners' needs. It's a great way to capture leads for your bank or credit union. Most Webinars can be recorded and provided to attendees via CD or e-mail link. All can be posted to your Web site as educational tools and resources. Intercall, WebEx, and ConferencePlus are three companies that offer a wide choice of reliable conference solutions.
• Tech Reality Check #4: Partner with the local SBA office and put a link on your Web site. It's a great referral source for your business bankers and lenders.
• Tech Reality Check #5: Fly fishing in the competitive experience pool comes with a heavy price. Customers should understand they are relevant not only to the banker but also to senior executives and boards. I strongly encourage quarterly "get-to-know-you" meetings for your customers that include bankers, executives and credit committee/board members. Even personal calls to the business owners by executives can go along way when the Pied Piper plays the customer pipe to a local competitor.
• Tech Reality Check #6: Blogging has become the latest fad. It's sure to continue it's evolutionary route. Bank of America
  has been successful at establishing this resource/tool but smaller
  institutions can also join the movement and enjoy the benefits. Special
  note: Be sure your customers are happy.
• Tech Reality Check #7: Add value to your
  customers with online advertising. Before you throw up the "phishing"
  barrier, this venue is not intended to allow customers to buy. RealPeopleRealStuff can be branded for you in a separate link. It is a great way to promote your business customers to a targeted audience - your customers. And it can be a valuable tool for referring customers to your financial institution. One last major point. It's a great source of fee income. For a flat monthly fee your customers can upload a video promoting their business or service at rates competitive or below other media advertising rates.
• Tech Reality Check #8: In the lists of priorities, this ranks 1 or 2. Does your data processor or core system provide business banking solutions? Have you looked at a third party vendor for business solutions? Who does your
  data processor integrate with for solutions? How well do they work with
  you to implement complementary solutions? If not, you're behind the
  8-ball and have a lot of catch up work to do.

Look for solutions for Merchant Capture, Mobile Banking, and Online Banking. Check out Harland Financial Solutions' new business banking suite through Cavion. Let me know if you need a contact name. Several resources for vendors and suppliers
are BAI, Credit Union Times, CUES, American Banker, or Banking Strategies magazine.

Wireless networks, broadband cards, portable printers and Tablet PCs help banking become much more convenient for bankers and harder for the customer to say no.

Whether you're a newbie to business banking or a positioned player, there is room for improvement in sales and marketing strategies, hiring practices, business development plans, training programs and technology tools utilization. Meet your business customers where they are today and you'll see them again tomorrow.