Not all banks are created equal. Look for one that embraces forward-thinking tech.
There may be no more important relationship in business than the one with your bank. If you need money for a capital investment, it’s your financial institution that will give you a loan at, hopefully, a favourable rate. When it comes time to pay suppliers or staff, the right bank can make that process go smoothly and efficiently. Having the right financial partner will not only give you peace of mind, but working with someone who cares about your success will also make it easier to take more risks – and, ultimately, increase your bottom line.
Choosing the right bank, though, isn’t as easy as it may seem. On the surface, many institutions look the same – they offer business bank accounts, usually comparable interest rates, access to online banking, bill payments and more. Finding the best partner – one that can help you make money, rather than lose it – will require you to dig deeper and look at how they’re using technology to help their customers grow. Here are three things to think about when choosing a bank.
Is it forward thinking?
Too many financial institutions are still stuck in the past. While they may have online banking, that’s about all they have. Some may allow you to send payments from your bank account to a vendor’s account, but not through your own enterprise resource planning (ERP) system, which would make the payment process that much more efficient. To get a better sense of how tech friendly a bank is, it’s important to consider the following questions. Is the bank trying out new technologies? Is it working with FinTechs to offer new and innovative services? Is it investing in coders to help bolster its own services? (Citibank recently announced that it plans to hire 2,500 coders in 2020.) If the answer is no to these questions, then you may find it more difficult to do business through them in the future.
Does your bank’s software talk to yours?
One constant headache for companies is having to use multiple systems to pay vendors. If your ERP system could talk to your bank, then making payments would be a lot easier. JPMorgan Chase figured this out – it offers a service called Treasury Ignition, which is an end-to-end wholesale payments experience. The company built a NetSuite plugin that allows companies to pay vendors directly through their ERP system. It also gives them options on how to pay, whether it’s by ACH, wire or check. Status and balances are updated in real time, while a detailed history makes it easy to keep track of what’s been done. (It uses FISPAN to connect the bank’s software to its client’s ERP system.) Having these two sides talk to each other can help executives run their businesses much more efficiently.
Are they in the cloud?
Almost every industry is moving toward the cloud, except for one: banking. According to a 451 Research survey, only 18% of financial services companies are fully deployed on the cloud. (We previously wrote about how banks can adopt the cloud without having to go all in.) The ones that will meet your future needs, though, will have to be more virtual, at least in some capacity. Most of the programs you use today are cloud-based, which means your software provider can issue new features or update glitches whenever they’d like. Banks, on the other hand, can take forever to push out an innovation. With technology changing so rapidly, and business happening at breakneck speeds, having to wait for an improvement is not something many people are now willing to do. Look for a bank that has at least some of its processes and programs in the cloud, so that they can keep up with your business’s changing needs.
While there are many other factors to consider – is their corporate customer service responsive? Can they help you online versus having to wait on the phone? – how a bank approaches technology should be a big determinant in who your organization chooses to work with. The ones that are tech savvy will be best positioned to help improve revenues and keep your organization growing in the long term.