Published: August 09, 2010
In the last two editions of TMI, J.P. Morgan has explored some of the issues that matter most to treasurers today, focusing firstly on risk management and secondly on efficiency. In the third article in the series, we look at the importance of relationships between corporations and their banking partners and how banks such as J.P. Morgan are ensuring a strong, positive relationship from the first engagement through many successful years of working together. Over recent months, when both banks and corporations have been under stress, the right relationships, built on trust and open communication, have been essential in weathering the difficult times.
Building a client services organisation in a global bank is a challenging and complex task.
The importance of relationships between banks and their clients has been discussed a great deal since the financial crisis first struck. Supporting clients through good times is easy, but it is in challenging periods that a bank can stand out from its competition by delivering the relationship support that is easy to sell but hard to deliver. Typically, many people assume that a relationship with a bank refers to the willingness or ability to provide credit; in reality, banks assist their clients in a variety of ways. An effective relationship between a bank and its client requires a clear and detailed understanding of the client’s business and challenges, both as an individual company and across its industry. This enables the bank to propose the most effective solutions to business problems, some of which may not yet have even become apparent, such as regulatory changes affecting a particular industry. Equally important is for the client to understand its banking partner’s long-term strategy and be confident that it fits in with their own growth strategy.
J.P. Morgan has had a culture of fostering confidence and trust for many years. By leveraging expertise as a trusted global provider, the firm looks to help clients easily and reliably collect, move, concentrate and invest their cash. A relationship based on trust relies on straight talking. Just as J.P. Morgan would expect a client to tell us if we were not delivering according to their expectations, so too will we tell a client if we think its treasury or cash management strategy is at odds with its corporate objectives. Clients are looking for their banks to be proactive in delivering solutions, anticipating their business challenges and providing foresight of new regulatory requirements. Maintaining close relationships with each client is the only way that a bank can gain the necessary level of understanding to be able to add value to a client.
Building a client services organisation in a global bank is a challenging and complex task. It is essential to align the service model with clients’ needs and behaviours, which is no small feat for a bank such as J.P. Morgan which supports over 100,000 clients globally, with a diversity of sizes, cultures, business organisations, objectives and product needs. Consequently, as one size does not fit all, it is important to ensure that a variety of service offerings are available and that these can be combined and tailored in a way that meets clients’ support requirements.
The critical element in achieving this is to ensure a full understanding of the client, which starts from the very first engagement and continues as an ongoing journey. A variety of factors will influence a client’s support needs, not least the countries in which it needs banking services, language requirements, business and national culture, time zones, business segment or industry, products used and degree of technical sophistication. Sales professionals, relationship officers and client support staff all have a role to play in ensuring that the support arrangements are suited to the needs of a particular client. Whilst the sales team will conduct the initial communications with a client, we ensure that client services personnel are involved as early as possible in the sales process, often while we are responding to a request for proposal. This ensures that commitments made up-front are realistic and that client expectations can be fulfilled. By involving client services as early as possible, we are also able to provide as seamless a hand-over as possible between sales and client services.
Having fully understood a client’s requirements, we structure a support proposition, leveraging one or a combination of the support tools that are available, including online self-service tools, local support and pooled central resource. Designing a client service approach for multinational institutions poses particular challenges due to the diverse nature of their requirements. For example, a centralised company may need local support for its regional treasuries and/or shared service centres, in addition to a relationship officer working with head office or group treasury to ensure that the overall banking needs of the organisation are addressed. A decentralised organisation may require on-the-ground support for geographically diverse business units in their local language, backed up with 24-hour support from a central support centre. Our model is flexible yet cohesive to ensure the client feels that it is working with one organisation.[[[PAGE]]]
The role of the client services organisation begins as soon as a client has decided to work with J.P. Morgan. The initial implementation is the most critical period of the relationship between a bank and its clients, when expectations are at their highest, commitments made are fresh in people’s minds and first impressions of the working relationship are formed. The least successful implementations are those where communication between the bank and client is not structured, frequent and transparent. It can be a stressful time for the client unless it has the assurance their bank is on top of everything and is keeping the communication flowing. The process needs commitment from both sides; at J.P. Morgan, therefore, our team is very clear in setting our expectations from the client. Once the implementation is complete, we are very aware that putting in place a service arrangement for a client is not a one-time event, and needs to be monitored closely to ensure that clients receive the right level and type of support as their requirements, geographic coverage and business organisation change. Furthermore, new individuals joining a company will have different wishes and expectations which need to be addressed.
At J.P. Morgan, we would never wish to be in a position where clients come to us dissatisfied with the service they are receiving; instead, we take a proactive approach to seeking feedback on a continuous basis to anticipate the need to refine our client service model or adapt the approach for an individual client. In addition, as individuals will invariably change, both within the client organisation and the bank, and/or different people will be engaged with a client at different times, it is vital that in case of any issues, whether from a product or service perspective, clients can escalate their concerns to their primary point of contact within the bank. This person acts as an advocate or ‘champion’ to mobilise resources and ensure that the bank is continuously providing products and services that are aligned with the needs of their clients.
Having the right people involved is a vital component of a client services organisation, people who are motivated to promote and support a client’s needs, and to communicate internally to ensure that services are provided seamlessly. In addition, particularly for a global organisation like J.P. Morgan, the right technical infrastructure to support client service professionals, wherever they are located, is essential in order to maintain a consistent approach to dealing with a client issue and to ensure that everyone has a common view of client information. This is an area in which we have invested significantly and from which our clients receive considerable benefit.
Relationships between banks and their clients have inevitably been tested during challenging economic conditions, but the long-term impact of this is likely to be positive. No longer is the relationship one of ‘supplier and provider’ but a partnership of equals based on common goals, with a clear understanding of the requirements and constraints of the other. Deepening client relationships is positive in terms of a bank’s ability to deliver appropriate solutions to their clients, as with a better understanding of their clients’ business and priorities they can design solutions that add specific value. Delivering solutions and the right client services to support these solutions requires a combination of the right people, geographic reach, ease of access and technology infrastructure. These elements are pivotal to J.P. Morgan’s investment strategy in order to provide the optimum service to our clients and to support their current and ongoing needs. Constant feedback, reinforcement and review of services mean that a client’s expectations at the start of a relationship should be fulfilled and exceeded over many years.
How Thought Leadership Can Reduce the Cost of Sales by Patrik Havander, Havander & Partners A focused attention on the costs incurred by the global sales and marketing processes is becoming increasingly important for corporate banks and their transaction banking departments. While the client/bank relationship remains vital, research has shown that in fact relationship selling […]
