Selecting the Banker for Your Business

Your Banker Will Have A Relationship To Your Business

Like Your Personal Physician Has With You

By Jimmy Walker

I am often asked what qualities business owners should look for when looking for a bank. When you look objectively at banking institutions, they look remarkably similar. Too often the business owner looks at banks from a transactional point of view, when they should be looking at their choice of banks from a relationship perspective. That is why this article is titled Selecting your Banker and not Selecting your Bank.

Using technology, small banks and large banks are on a level playing field when it comes to products. The difference in banks is ultimately dependent on the human side of the equation rather than the technological or product side. Therefore, instead of selecting a bank, you should select a banker. What should your criteria be? First, you want a banker who is knowledgeable. Second, you want a banker who is responsive and reliable. Finally, you want a banker who is empathetic.

Through an interview process you can determine if the banker has the knowledge you seek. Knowledge is dependent on experience, education, and continued training. These are generally quantifiable. For the second and final criteria, you may obtain useful impressions through an interview, but you will also need references. This is the world turned upside down! Normally you expect the bank to ask for your references, but if you are putting the same amount of thought into selecting your banker as your other professionals, it is logical that you will seek references from the prospective banker. A professional banker may not respond to your request immediately, because client list are confidential, and permission will be required to give clients' names to you.

Why do you go to all this trouble to select a banker? The banker you select will have a relationship to your business that your personal physician has with you. Your banker should be the professional you rely on to diagnose the financial health of your business.

Where do you find your banker? Large banks' most knowledgeable officers are often assigned to the banks' largest clients. If you work with a large bank, then you may need to look beyond your local branch to find a banker. There, qualified bankers may be in divisions with names like Business Banking, Private Banking, or Professional Banking.

Whether at a large bank or a locally owned bank, you may meet young bankers who lack the experience you expect. This does not have to be a negative. These individuals can make up for their lack of experience with enthusiasm. Ask these bankers which banking schools or training seminars they have recently attended so you can evaluate their career development. It is important that you meet their supervisor. If their boss has the knowledge and favorable client references you seek, and you believe the manager will be a good mentor for the younger officer, then your needs will probably be met. I have maintained a professional relationship with banking clients for over twenty-five years. Fortunately, long ago, they took a chance on me, a young and inexperienced banker.

While it is understandable that many business owners first think about large banks because of their omni-present branch systems, you may be pleasantly surprised if you evaluate bankers at community banks. Most community bankers concluded that climbing a corporate hierarchy is not the most important thing in life. Rather, they found that developing long-term professional relationships is more rewarding. The bank they represent was probably organized with a mission to serve small business owners.

Remember that you are looking for a professional who is knowledgeable, responsive, reliable, and empathetic, who values your confidentiality. You would not expect less from your attorney, accountant, or doctor, why should you accept less from your banker?

This article was originally published in Competitive Edge magazine in the May/June 2002 issue.