In Treasury Services “easy” does it

The client “verbatims” alone make a recently released research report from West Monroe Partners worth reading. Here’s an example:

“We know who the experts are at the bank. That’s who we call. We routinely bypass the bank’s problem resolution model. It’s just easier to call the experts”—from the treasury and finance director of a city in the Detroit metro area.

Such comments are scattered through the report, entitled Make It Easy: In Treasury Management, Client Experience Rules. West Monroe Partners, a national business and technology consulting firm, wrote the report primarily based on one-on-one interviews with 22 corporate treasury professionals from small, medium, and large organizations. The calls were conducted in the fourth quarter of 2017. In addition, the report incorporates quantitative research from other firms as well as being “informed by years of roundtable discussions as well as extensive communications with advisors to the financial services industry.”

Ripe for disruption

Overall, the picture presented is not particularly flattering for banks. The target audience for the report is larger institutions—the traditional providers of treasury management services. Toward the end of the report the authors note in a “sidebar” an important point: “The combination of valuable-but-dissatisfied clients and sluggish, unresponsive service providers portends a sector ripe for disruption.” The disrupters in some cases may be smaller, but more nimble, banks that partner with fintech technology.

Right at the outset, the report makes clear what clients want: “Clients value ease of doing business above all else. No matter how competent the bankers may be, most clients would readily shift their business to a bank that offers a better experience.”

And what does “easy” look like? There is a schematic in the report that shows ten client-defined attributes. Among them: Relationship/Treasury Manager Responsiveness; Integration; Operating Quality; Documentation, etc. Again the verbatims from actual clients cut to the chase:

• “Bank systems designed for consumers are intuitive, banks systems designed for corporations are impossible.”

• “The transaction initiation and approval process was actually far more efficient when we faxed instructions to the bank and then called to verify the fax.”

Fax? More efficient? Ouch.

The benefits of “easy”

West Monroe’s experts noted that, while profitable, treasury management services are increasingly “commodified.” Even innovations, like remote deposit capture become standard features in matter of months now, they say.

The report goes on to say that while exceptional bankers can make interactions easier, they cannot mask cumbersome processes. Indeed, bankers are often hamstrung by their own internal processes, and the report points out that in addition to building customer loyalty, and growing the business, improving processes will also improve banks’ efficiency, and free up employees for higher value-add work.

Related to “exceptional bankers,” several of the interviewed treasury managers trashed the “quarterback” model used by many banks. The quarterback is a single point of contact for the client—it’s meant to facilitate things. Maybe it does at some banks with fewer silos or better systems, but for others, it was clear, as the opening quote indicates, that the quarterback was just an extra and not very effective step.

The report did say, however, that “West Monroe believes clients still value the quarterback model for day-to-day service, coupled with a clear list of specialists to contact as needed.”

Another benefit of improved ease of doing business—or customer experience, if you will—is to help banks win more referrals. The report notes that while treasury clients rely on rankings by research firms, they also “valued the candid, unfiltered perspective of peer referrals.”

Challenges to easy

In its interviews with Treasury managers, West Monroe surfaced three main reasons for poor customer experience—none of them new, and all of them thorny.

Outdated Technology. Despite all the emphasis on streamlined digital services, they don’t appear to have made it deep into the treasury management business at larger banks. Clients said they are under intense time pressure and “pleaded with banks to ‘walk in their shoes’” and streamline their (the banks’) services.

Red Tape. Corporate treasury clients appreciate the need to collect information for compliance but asked that the process be less time consuming. Some praised banks that provide them with fully completed documentation.

Turnover. Always a problem at any business. Turnover in bank teams was mentioned by the clients interviewed, resulting in missed handoffs. Having multiple contacts can decrease the disruption, the report’s authors noted.

Steps to improve

The latter part of the report covers “Five steps to achieve ‘easy’ status.” These are: 1. Develop a client-first strategy for delivering value; 2. Measure and benchmark ease of doing business; 3. Build governance and leadership to hold people accountable; 4. Change the bank’s culture; and 5. Consider client experience when upgrading systems. Each of these is discussed.

One point from No. 3: “When decisions are made at most banks, client impact is typically not built into the approval process. Managers analyze risk, costs, ROI, and other factors.” But “client experience” needs a seat at the table, the report states, and indeed some banks are appointing chief client officers.