From Reactive Lending to Proactive Advice in Business Banking

Let’s face it, the entire financial services landscape has been changing in significant ways. While, in the past, financial services firms and banks were the place that individuals and businesses turned to address their needs, the reality is that new entrants to the marketplace have encroached into the competitive space. When you add to that the intense competition among the traditional players, Bankers in any role must be more capable and adept than ever before to be relevant.

And this is undoubtedly the case for Business Bankers. Historically, Business Bankers have been able to rely on the bank network to support sourcing new clients who, in most cases, had already established and identified their specific need(s). For instance, a business comes to the bank seeking expansion, needing working capital, or, say, needing equipment lease financing. The need is clear, relevant and easily recognized by the banker… leading to a referral to the Business Banker. The Business Banker, certainly sophisticated in facilitating those needs, was able to facilitate solutions and therefore deem that client to be a “relationship”. However, in many instances, the client interactions with the banker were at most biannual and merely consisted of updates on the current status of the business, with little proactive, strategic thought leadership being delivered. But given that in a true relationship there should be an ongoing exchange of value between each party, one has to question if these update meetings were worthy of being deemed a “relationship” when they only dealt with the current scope of the relationship and nothing more.

While one can certainly argue this point, organizations and bankers alike must strategically assess their business models and approach with clients to determine if they are developing true, in-depth relationships of significance with their clientele, or if they are still more in a transactional relationship of convenience.

Today, the leading Business Banking organizations are moving to a much more sophisticated, proactive model where the expectation is for the banker to be a proactive, strategic advisor to the business across multiple areas of their operations. In that role, the banker must have the acumen to assess the unique situation of each business in their portfolio and proactively develop new ideas, identify current risk, and communicate new opportunities to support the business goals and priorities of each client.  In our work with Business Bankers, we believe that while this model is a future requirement for competitiveness, firms are struggling to define the specific competencies required to execute this proactive, advice-centric model.

Two Key Competencies

While this model requires a range of skills and abilities, there are two that are the most meaningful – the ability to facilitate the art of comprehensive Discovery and, secondarily, the ability to translate that information into more meaningful conversations that generate enhanced client engagement.

  1. In the case of discovery, our experience has consistently shown that Bankers and the Organization as a whole feel like they are effective in this aspect of the sales and relationship process. Yet, when we ask for the specific details and standards they use to ensure comprehensive, effective discovery is occurring, we see a wide variation in what each banker in the firm identifies as their discovery process. While any given banker in any given relationship might execute effectively, the question remains as to the consistency across all bankers and all relationships. Given that any advice-centric model is predicated on an effective process of discovery, this is a vital element of the model that needs to be clearly defined, and Bankers must be effective in the art of gathering the breadth of information required to be able to assess and deliver valuable advice.
  2. The second key competency is the ability of each banker to consistently assess the information they have on a client and translate that assessment into engaging conversations with each client that are relevant and To be relevant and valuable to the client requires that the client have a clear and compelling understanding of their needs. While it is relatively easy for any banker to define needs, additional skill is needed to be able to get the attention of the client and truly engage them in a conversation that helps them become aware of that need. This is the core of the advice model – the ability to be a peer at the table with the business executive and be recognized as a strategic business consultant helping the client address specific challenges that they see businesses facing and struggling to address effectively. While many believe they already do this, the reality is that we see only the top-producing bankers with a long history and experience in the business being truly effective in this element of advice. The key is to develop a framework that helps procure the expertise of any individual banker and translate it into the conversational framework that can be applied by any banker, regardless of their tenure or experience.

In our work in the segment, Greene Consulting has worked with organizations to define clear structures, frameworks and even templates and resources integrated into a firm’s CRM system that establishes with absolute clarity the standards for both discovery and how that information is used to translate into proactive conversations around key client needs that becomes the basis for the actual fulfillment of an advice-centric model in Business Banking.

For more information on our work, perspectives or capabilities in this area, contact David Greene at 404-324-4600.