Borrowing money for business

Is being a Bank Relationship Manager an impossible job?

We think it is…

All banks promote the concept of the Relationship Manager; but based on what we have seen and what many other people tell us, the banks have created an environment where it is almost impossible for their personnel to deliver it, in the way that Managers would like.

This is what some frustrated Managers are fighting against.

1. Relationships do not motivate the people who run banks and make the big policy decisions.

For too long, many of the banks’ senior executives have seen their jobs as a way of enhancing their CV and not as a long-term career. Too many were rewarded by annual bonuses and share options, which led to a focus on the short-term. Over the years, the organisations they run have gradually become an imitation of themselves.

2. Bank Managers cannot properly serve two masters.

The natural instinct of many relationship managers is to try to do what is best for their customer but all too often, they are conflicted by a top-down pressure to hit targets and maximise profit. The best relationships thrive over the long term, whereas in banking profit is about the short-term.

3. Managers do not have enough discretion.

In reality, managers cannot offer a true relationship based service without sufficient discretion in the things that really matter – and for borrowers that means the authority to make lending decisions.

4. Relationships are based on trust;

however, in the eyes of many customers trust is a damaged concept as far as banking is concerned. This is not necessarily the fault of the front line relationship managers. PPI mis-selling; SWAP mis-selling; manipulating the LIBOR interest benchmark, the Energy Markets and the Foreign Exchange markets – these are clear evidence of the culture that has been allowed to take root in our banks. This culture will not change for a long time to come because, as the saying goes, leopards don’t change their spots.

5. Bank personnel are not as skilled as they used to be.

Years ago, all staff would be encouraged to study for their banking exams, but this was replaced by an emphasis on product knowledge to serve the sales culture. Customers value advice, support and experience above product knowledge.

6. Banks are not as close to their customers as they once were.

They know a lot more about their customers but that is not the same thing. Since the 1960’s banks have been investing in ‘service improvements’ that have had an unfortunate side effect – to put their customers more and more at arms length. This may be justifiable on cost grounds; nevertheless, developments such as online banking platforms mean that customers are self-sufficient in everything from managing their bank account and sending money abroad, to dealing in stocks and shares and applying for products & services.