Successful corporate banking: keep customers close

Managing banking relationships

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Managing banking relationships

Corporate executives agree that banking relationships can take years to build and solidify. Many businesses “grow up” alongside their banking partners.

Financial institutions that commit the most time and money toward their corporate client relationships are considered core banks, which provide the necessary levels of credit to sustain their clients’ businesses. In our study, the number of core banks that corporations use varies from a single institution to as many as 20.

Number of core banks

Number of core banks

Most executives (75%) said they do not have a formal process for reviewing core banking partners. Instead, they make assessments informally or when they renew their credit facilities.

Nearly two-thirds of respondents indicated that the evolving regulatory environment has not seriously affected their banking relationships to date. However, they closely monitor bank stability and any potential risks to their organizations.

“Keep an ongoing dialogue with your clients. Be open to suggestions. Don’t worry about how it fits in the box that exists. Draw new lines, and create a new box.”

Several noted they might increase their number of core banks to reduce organizational risk. Others worry that new Basel III regulations requiring banks to hold additional reserves will make borrowing money prohibitively expensive, as well as increase bureaucracy.

Although respondents were split on whether their banking service needs will change over the new few years, they identified two factors as most likely to drive change: Basel III (as noted above) and internal changes within their own corporations.