BOSTON
–– November 7, 2011 –– In reaction to the financial crisis and recession,
treasurers are increasing their due diligence on potential banking partners and
delving deeper into the health of existing ones. In fact, a bank’s perceived health can make
or break its ability to win corporate business or preserve corporate clients,
according a survey by the Association for Financial Professionals (AFP).
The
2011 AFP Treasury Benchmarking Survey, underwritten by PNC, found that over 70
percent of corporate treasurers consider a bank’s health to be a significant
factor in initiating or maintaining a business relationship, and 19 percent
changed banks last year due to concerns about a bank’s health. Yet, companies
put great value on the stability of their bank group—6 out of 7 say that maintaining
a stable bank group is important. Of those surveyed, the average company
maintains about five banking relationships, which endure about 10 years.
“The instability of the financial system has
caused companies to take a closer look at their banks and solidify
relationships with the ones that can help them accomplish their business goals,”
said Jim Kaitz, AFP’s president and CEO. “They are monitoring banks on their
own, beyond information provided by rating agencies.”
Other factors that treasurers consider when
considering banking partners include strategic support, superior products and
services, historical relationship, ability to provide access to credit, and the
bank's global footprint. Despite economic pressures, only half of survey
respondents indicate that cost is an important consideration for establishing a
bank relationship.
Some
technologies have greatly enhanced banking relationships, treasurers say. Nearly three out of five survey respondents
indicate that electronic bank account management (eBAM) for bank account
maintenance has been an important development.
Another Forty-three percent believe cross-bank zero balance accounts
(ZBA) have also been an important.
The
42-question survey generated
responses from 720 organizations, evaluating operational issues for
treasury departments that directly impact an organization’s success. In its
three-year lifespan, this is the first time the survey has emphasized bank
relationship management.
Corporate treasury
departments use the survey as a basis for comparison with the best of their
peers. It identifies performance levels of
participants, analyzes performance by peer group, and defines world-class (80th
percentile) targets across key operational areas ranging from processes to
personnel to technology.
View more survey results on www.afponline.org/benchmark
About AFP®
The Association for Financial Professionals (AFP), headquartered outside
Washington, D.C., serves a network of more than 16,000, members with news,
economic research and data, treasury certification programs, networking events,
financial analytical tools, training, and public policy representation to
legislators and regulators. AFP is the daily resource for the finance
profession.
AFP's global reach extends to over 150,000 treasury and financial professionals
worldwide, including AFP of Canada; London-based gtnews, an on-line resource
for the treasury and finance community; and bobsguide, a financial IT solutions
network.