The number of bank relationships is in a state of flux, with most companies now using between two and five banking partners, creating intense industry competition, finds a survey by gtnews, a global financial information resource.
In the post-crisis environment, satisfaction with corporate banking partners has become decidedly mixed. Levels of satisfaction are slightly higher among organisations with annual revenues under $1 billion (USD).
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And only half of Western European respondents rank their banking partners highly, possibly reflecting the point in economic cycles across the region where banking services providers are currently. In contrast, more than three-quarters of North American practitioner respondents in the U.S. and Canada rank their banking partners highly.
Beyond basic payment services, banks are viewed sceptically, finds the survey. While over half of corporate practitioners rate their banks highly on payments services, fewer than half hold this view for any other service category, with European corporates being the most critical.
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Most organisations rank quality of services provided as the most important criteria for selecting a bank (98%), followed by stability of the financial institution (96%), availability of services such as credit (95%), pricing (88%), technology (82%), and how well the bank understands the organisation’s business (82%).
Western European respondents are less likely than those from North America to rate a bank’s understanding of their business as a top factor in selecting a bank (66% versus 91%), suggesting they place a greater value on their banks getting service availability and quality right first.
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Mobile banking for corporate treasury, while an interesting concept, was ranked as an important factor in selecting a bank by only 55% of respondents, likely because there is little difference in mobile/online banking services from bank to bank.
“When corporates look to their bank partners, it’s the basics that are still most important of all,” says Graham Buck, editor of gtnews. “In an uneven economic recovery, good banking services and stability outweigh the most forward-looking mobile app.”
Nevertheless, technology does factor into the bank selection process.
“Technology capability is now in the top five criteria for selecting a transaction bank relationship. The research results tell us clearly how quickly the corporate market is driving single access across all products on a near real time basis,” says Penny Hembrow, global head of banking in CGI. “The Banks need to be ready for this shift.”