For bank relationship managers, the annual review of a corporate banking relationship can feel like a time-consuming and often thankless chore. But if you approach the review with the right mindset, you can turn the obligation into an opportunity—to develop deeper insights into your customer’s business, to identify areas where the bank can provide new or expanded lines of service, and to transform the relationship from transactional to truly strategic.
In this post, we’ll talk a little bit about the original function of the Annual Relationship Review, identify some of the reasons why it is so often viewed as a chore rather than an opportunity, and provide five proven methods to help your relationship managers make the most of the review’s potential.
Introduction: Overview of the Annual Client-Relationship Review
Originally mandated as a way of updating credit risk analysis in response to regulatory requirements, the annual relationship review was for years siloed in the credit or risk management department. But more recently, responsibility for the relationship review has passed to the Banking Relationship Manager, the person assigned by the bank to “quarterback” the relationship with the customer and charged with increasing the value of the relationship over time.
Seen by most relationship managers as a “dreaded exercise” (https://www.onci.com/blog/
Most relationship managers see the pulling of this information as similar to pulling teeth—because it is. Clients, understandably, would rather not spend time collecting the data needed to conduct a thorough updated credit analysis, and will often procrastinate as a result. Further, clients may feel that the annual review will call their loan or lans into question, and so may not be eagerly forthcoming about the provision of data. And third, even when the business is evolving positively, clients may be time constrained, and see the relationship review as a bureaucratic, rather than strategic exercise.
Meanwhile, inside the bank, the effort to prepare for a relationship review can be difficult as well. The Relationship manager may need access to data about the customer that isn’t readily accessible from other departments. A true 360-degree view of the customer’s use of bank services, from Treasury, to corporate lending, to credit cards to investment, may not be easily available. And when all of the data has been gathered, it can be extremely difficult to assemble it into a coherent presentation that the client can digest.
Now, take this complexity and multiply it by the dozens of accounts that a strategic relationship manager owns, or the hundreds of accounts assigned to an SMB relationship manager, and you can see how the process itself might collapse under its own weight.
How To Simplify and Streamline the Review Process
- Create A “Pick And Mix” Relationship Review Template For Relationship Managers to Follow: Most relationship managers, especially those who are early in their careers, start with a narrow view regarding the purpose of the relationship review. By setting up a template that includes sections for the full-breadth of issues to be considered, you can help to widen their perspective and begin thinking about the review process more strategically.
Build your template in sections that can be tackled easily in a single session. Allow your relationship managers to remove optional sections, but ensure that there is a “core” set of sections that all reviews must include—either for regulatory purposes, for the bank’s individual needs, or both. Allow your relationship managers to vary the sequence of the sections to fit the customer’s needs and the manager’s individual presentation style. And be sure to give managers the flexibility to add as many different documents, or pages, to a section as they might need.
When it comes to the “core” sections of your relationship review template, think through the considerations that customers take into account when they’re evaluating banks for their business in the first place, and make sure that you provide space and content to answer those critical questions. You never know how many new players might have arrived at the client since your last review, and it’s important to share this kind of information with newcomers. For example:- Does your bank have a corporate banking portal? Make sure one section in the review describes the features and ease of use of the tool.
- Does your branch network map well to the customer’s physical locations? This can be a key point when selling initially. It may also help stave off churn.
- Does the bank integrate with the customer’s ERP or TMS system? These kinds of “wires in the walls” help to enhance the “stickiness” of the relationship
- Is the bank’s size and scale appropriate to accommodate foreseeable growth for the customer? This is particularly important to point out with customers who started with the banks when they were small but are now thinking they may need a larger financial partner.
- Is the customer taking advantage of all the services the bank has to offer? This is the perfect place to take a “land and expand approach".
- Set Up A Single System To House Relationship Review Data. Comprehensive relationship review documents can include spreadsheets, tables, charts and graphs drawn from a broad variety of departments and feature different styles, fonts, and branding colors. The key is to ensure that your document generation platform incorporates all this different content into a single, over-arching “look and feel” that’s consistent with your bank’s brand voice. They key here is to strike the right balance of brand voice for the bank, and productivity for the relationship manager. Your ERP system, for example, may product tables using a font other than those listed in your brand guidelines. If that’s the case, you’ll have to make a decision as to how much your brand can “bend” before it “breaks.”
- Use Collaboration Tools to Distribute the Document Preparation Workload: When relationship managers are assembling components for a relationship review deck, they need a place to keep everything associated with a given customer within easy reach. They may need to request that customers provide some of the input components—for instance, a recent income statement—themselves. That means your document generation platform should be able to support upload of documents from a broad set of sources, and it should provide an easy (and ironclad) way to ensure that nobody outside of the approved relationship-management team can access the customer’s content.
- Broaden the Scope of the Review Beyond Credit Risk Alone: The time and effort associated with acquiring current risk-analysis data is made worse by the client’s perception of the exercise. Understandably, they see it as effectively an audit of their current position, one that could put a given loan or portfolio of loans under scrutiny. Rather than strengthening the relationship, a review process focused primarily on risk-analysis can actually erode trust and limit opportunities—exactly the opposite of the intended effect. To change that dynamic, customer-centric banks today are expanding the scope of the relationship review to encompass the issues far beyond credit risk alone. The customer’s strategic objectives, financing needs, and competitive challenges can all form a part of the discussion, as can the bank’s complete range of services—from Treasury, to strategic investing, payroll services and beyond.
- Begin the Review Process with Document Sharing—Long Before the Review Session Itself. Savvy relationship managers have learned to partner with their customers to ensure that the credit-risk decision is supported by comprehensive, accurate and up to date information. By “getting on the same side of the table” as customers, the relationship manager can arm Risk Management departments with a more complete picture in which to make their credit decisions. And a great way to do that is to make the Relationship Review deck a shared work between bank and customer.
The Best Way to Streamline Annual Banking Client Relationship Review Creation
The difficulties associated with an effective relationship review almost always boil down to labor intensity. Gathering information is time consuming. Maintaining that informations currency is, likewise, intense. And presenting it, both to customers and to Risk Management, takes work as well. Innovative banks today are using advanced applications to streamline and simplify the process, often augmented by generative AI technologies, to streamline the review process, and enhance its strategic impact.
