The competition is heating up in the world of business banking. New non-banking entrants such as Wal-Mart, Kabbage.com and PayPal are offering products that compete directly with traditional banking products. In fact, many banking products are quickly becoming commoditized.
The one area where banks can gain a competitive advantage is in the area of Treasury Management Products. These products include Merchant Services, Online Payroll, Pay Cards, Positive Pay, ACH Collections/Payables/Debit Filter, Web Invoicing, Lockbox, Wire Transfers and Remote/Mobile Check Deposit among others. These products are typically your most profitable products however they are the least understood. Why?
Technology companies have known for a long time that the way to keep a customer sticky is by being inside their customer’s business process. Once inside the business process, the bank can analyze collected data and help the customer in many ways that provide value to the business and ultimately the bank.
Treasury products are the best products the bank has to keep sticky customers. Treasury products were initially developed for sophisticated commercial (large) businesses by large banks; however, smaller banks are launching and/or expanding their treasury management. Today, there is confusion in the business market about treasury management products – the products are fairly complex, there is too much jargon, they require a treasury management expert to explain them and to set them up, and there isn’t enough treasury management expertise available in the branches.
But if banks were able to resolve these hurdles, this is an area where banks can truly add value for their business customers and compete successfully and for the long-term—without huge new investments.
A greater focus on selling and servicing treasury products can transform your business from a transaction-based model to a more lasting, mutually beneficial one in which you can increase your revenues and margins by partnering with your business customers to improve their competitiveness.
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