Understanding corporate clients: Why banks need to rethink their business models and approach to client relationship management

Abstract

Corporate treasurers need banks to provide advisory driven cross-product responses to their business issues, while maintaining access to the bank's product specialists. On the one hand, given the need to maintain product specialisation, banks face potential hurdles and challenges to execute a cohesive advisory response across products. On the other hand, banks who have successfully adopted an integrated client management response have demonstrated a 40 per cent average increase in their returns on a representative sample of corporate customer relationships. The treasurers obtain a higher quality of advice and solutions execution from their bankers and, in return, will allocate more profitable wallet to the bank that can provide it. This ultimately improves the treasurer's ability to address critical business issues. Implementing a treasurer's agenda programme in a bank requires an origination process that unites product business lines. It is also heavily dependent on an advisory–sales driven approach. Medium sized and regional banks have demonstrated a time to market competitive advantage over global banks in implementing a treasurer's agenda programme for similar customers. This is mainly due to the ability of non-global banks to overcome thorny trade-off issues across product lines more quickly, and to have less complex product and geographic organisations.