Insight Associates provide outsourced accounting and Finance Director services to ambitious and growing businesses. We work as your only resource or with existing staff to give you complete financial support including monthly management accounts, high level financial advice, robust controls and financial systems, funding and business planning, payroll & compliance, VAT returns and statutory compliance.

Successful business leaders have all the information they need to make good decisions…Do You?

Monday, November 07, 2016

Are you with the wrong bank?


Banks...the institution we love to hate above all others.







Indeed, I had one client who complained about his company’s bank incessantly. The customer service was bad, their Internet banking didn’t work and nobody took time to find out about him and his business.

One day I stopped him in mid-flow.

“Our relationship with our own bank couldn’t be better.  Everything happens quickly, we can speak to a manager whenever necessary and their local manager even came to visit us to learn more about our business.

“If you don’t like your bank,” I asked, “why not find another one that will offer your business the same level of service?”

I even offered to help him move, as we have done for several clients, because a good relationship with your bank is crucial for smooth financial management.

He stared at me blankly. It had never occurred to him to move.

We often like to complain about our bank, but the trouble is we seldom do anything about it.

Research shows that customers are likely to stick with the same bank once they’ve opened an account, no matter what. When they start a business they will almost certainly go to the bank where they have their personal account.
 
It doesn’t make any sense. You should be shopping around for the bank that’s best for your company.
 
Not long ago, it didn’t matter as much. The four big banks probably all had a branch near you, and offered broadly equivalent services.
 
But following the banking crisis, the industry has gone through a period of enormous change. Not only have the big banks started to break up – welcome, TSB - we’ve also seen the arrival of new ‘challenger’ banks such as Metrobank, Atom, Aldermore, Handelsbanken and others, which are much more ‘niche’.
 
At the same time, many larger banks are closing smaller local branches, with a few abandoning the high street altogether in favour of the digital space.
 
There are now genuine differences between the banks, and genuine choice.

Here are some factors to consider:
  • What facilities do you need? Will you be cashing cheques, or depositing large sums of cash frequently? Do you need a deposit box? If so, you’ll need a bank with a physical presence near your headquarters. As I said, this is no longer a given for many banks – and over the next decade, will become even rarer….
  • Internet banking: Banks are doing more and more of their business online. If this is a facility you intend to use often, you must know that their security measures are up to scratch. I’ll go into this in more detail soon so watch out for the next blog.
  • Foreign payments: Do you conduct businesses overseas? If so, what are the fees like for foreign payments? This area is becoming much more competitive.
  • Charges: How much does the bank charge and what for? Make sure you understand all the charges because banks can be slippery about this.
  • What kind of relationship do you want? Do you expect to have a relationship with your bank manager, for example? Depending on your size, not every bank will be able to offer this.
The good news is that moving banks is no longer complicated. The banks will automatically transfer all your standing orders and forward all direct debits made out to you, so there’s very little for you to do.
 
So is your bank fulfilling your company’s needs? If not, it’s time to shop around.
 

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