What are the best practices for managing relationships with banks in treasury management?

1 Understand your banking needs

Before you choose a bank or a banking partner, you need to understand your own banking needs and preferences. What are the main objectives of your treasury management? What are the types of services and products that you require from a bank? How often and how much do you need to access liquidity, make payments, or hedge risks? How do you prefer to communicate and interact with your bank? These questions will help you define your banking needs and expectations, and match them with the offerings and capabilities of different banks.

3 Negotiate and formalize agreements

After you have selected a bank or a banking partner, you need to negotiate and formalize the terms and conditions of the relationship. This involves discussing and agreeing on various aspects, such as: the scope and level of services and products that the bank will provide, the fees and charges that the bank will apply, the performance and service standards that the bank will meet, the communication and reporting methods that the bank will use, the dispute resolution and escalation procedures that the bank will follow, and the review and renewal processes that the bank will implement. You need to document these aspects in a clear and comprehensive contract or agreement, and ensure that both parties understand and comply with it.

4 Monitor and manage performance

Once you have established a relationship with a bank or a banking partner, you need to monitor and manage its performance on a regular basis. This involves measuring and evaluating how well the bank is delivering on its promises and meeting your expectations, using various indicators and metrics, such as: the accuracy and timeliness of transactions and reports, the responsiveness and availability of customer service and support, the satisfaction and feedback of your internal and external stakeholders, the compliance and adherence to regulations and standards, and the value and benefits that the bank is adding to your treasury management. You need to communicate and collaborate with the bank to address any issues or gaps, and to explore any opportunities or improvements.

5 Review and renew relationships

Finally, you need to review and renew your relationships with banks or banking partners periodically. This involves assessing and reflecting on the overall performance and satisfaction of the relationship, using various methods and tools, such as: surveys, interviews, meetings, audits, benchmarks, and best practices. You need to identify and acknowledge the strengths and weaknesses of the relationship, and to determine and implement any changes or actions that are needed to enhance or maintain it. You also need to decide whether to continue or terminate the relationship, based on the costs and benefits, risks and opportunities, and goals and objectives of your treasury management.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?