Prompting New Business

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Commercial cash-management systems and their data can open doors

By Howard Schneider

Moving funds to where they’re needed each day, sometimes from moment to moment, is the life flow of most companies. Providing electronic cash-management services, and using those systems to glean valuable insights about commercial customers, should help community banks build stronger and deeper lending relationships.

Getting a company on board with a cash-management system “often includes a discussion regarding borrowing needs,” says Keith Burghardt, executive vice president and chief administration officer at Community Bank, a $365 million-asset bank in Joseph, Ore.

A cash-management director can be the first to spot opportunities from reports pulled from cash-management systems, says Patrick O’Brien, senior executive vice president and chief operating officer at Community Bank in Washington, Pa. The $850 million-asset community bank regularly looks at average account balances in checking and sweep accounts through its cash-management system to determine whether its clients are maintaining sufficient liquidity. Declining balances moving into sweep accounts may indicate that a business needs a line of credit for working capital.

“We’re very focused on growing commercial deposits and making commercial loans,” O’Brien says. “Our antennas are always up.”

A great solution

Offering competitive pricing on merchant services is one way Community Bank in Pennsylvania develops relationships with local businesses. Branch staff and commercial loan officers at the bank, which operates 16 retail offices, also work with cash- management personnel to provide complete financial solutions for clients.

Offering cash-management services online—such as electronic deposits and bill paying—ensures Community Bank remains “a market leader,” O’Brien adds. Clients aren’t likely to consider banking alternatives when their daily financial needs are being met efficiently.

“We’re always asking, ‘What can we do to help?’”
—Cathy Chatoian, Central Valley Community Bank

O’Brien advises community bankers to remember to have the “location” conversation with their business clients. Businesses may still sometimes feel they are limited to the services of the banks near them, he says. So answer this question for your business clients, even if it’s not asked: What’s more convenient than banking from your office? It’s remote deposit capture.

O’ Brien says community bankers should always sell the powerful advantage of community bank relationship banking, which is often accompanied by better rates and fewer fees that offset fees for valuable products such as sophisticated cash-management services. His community banking pitch: “We take the time to get to know you and customize the services in ways that make sense and create value for the business. We don’t shove the square peg in the round hole!”

At Central Valley Community Bank in Fresno, Calif., cash-management system managers accompany commercial loan officers on sales calls to explain the electronic business products and services the bank offers, says Cathy Chatoian, the bank’s senior vice president and cash-management team leader.

While Central Valley offers all its cash-management services online, it still has plenty of contact with commercial clients. The bank’s cash-management staff members typically become prime contacts for commercial customers. Chatoian says she is “constantly on the phone” responding to client questions. Customers simply may want confirmation that a wire transfer went through, or help in adding people to the payroll system.

Chatoian and her team often find themselves handling matters that aren’t related directly to cash management. Besides knowing their own products well, they should be ready to help clients reorder checks or stop payments, she says. “We’re always asking, ‘What can we do to help?’”

Burghardt points out that each business has varying degrees of cash-management needs, so understanding the purpose of the business, its structure and its operations is paramount to providing appropriate product recommendations. Two examples he offers: A small manufacturing operation may use cash management for other purposes, including paying suppliers via wires and potentially accessing an operating line of credit. Municipalities may have limited borrowing needs but may use a cash-management system to run payroll, receive statements and control access to internal accountants and staff. 

“Ultimately, almost every business will use a cash-management system differently,” Burghardt says. “It’s up to bankers to get to know their customers and recommend the best possible solutions based on a needs assessment of the business.” 

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Knowledge for sales

For that reason, cash-management representatives need a broad range of expertise. Additionally, these versatile workers must be able to work well with a large array of businesses—from farmers to municipalities and everything in between.

Chatoian combines regular site visits with customers and “constant analysis” of their bank statements and cash-management habits to uncover unmet banking needs. When meeting with firms, she tells them about new products and enhancements. Then she gets owners talking about their business.

“We’re very focused on growing commercial deposits and making commercial loans. Our antennas are always up.”
—Patrick O’Brien, Community Bank

Companies don’t mind paying for banking services if they’re receiving the benefits they want and the customer support they need, Chatoian believes. Explaining how positive pay services deter check fraud or that businesses can use remote deposit to scan checks shows companies how cash-management services will help them run their firm more efficiently. A banking relationship then is established, which commercial lenders are able to build on.

Cash-management teams can help entrepreneurs discover benefits their community bank provides that they may not have considered. “They’re not bankers,” notes Chatoian. “We’re there to partner with them.”


Howard Schneider is a freelance financial writer in California.

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