How to get maximum value from banks

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Picture by Hilary Maradzika

Often times we look at the bank as just a source of loans or merely a safe repository of our hard-earned cash. However, every bank customer has a right and opportunity to demand more from their relationship with their bank.

By Clive Mphambela

How can this be achieved?

There are several ways in which you can extract the maximum value from your relationship with your bank, beyond just getting deposit products and credit facilities. However, for this to happen you need to change the way you interact with your bank.

What is the role of effective communication between you and your bank?

Communication is the basis upon which any sound relationship between two or more people is built. The bank-customer relationship is one such relationship. Oftentimes we may feel intimidated to approach our bank for advice. This need not be the case. Through their new Code of Banking Practice banks are making a commitment to be both approachable and helpful.

However, the first step therefore is to improve the level of communication between you and your bank. Banking is mostly, if not wholly, about trust. Your bank must trust you and you must trust your bank. The relationship between a bank and its client begins when one walks into a bank typically to open a bank account. Throughout the banking relationship, from the account opening process, information will flow to the bank from the client and vice-versa. Banks are careful that client information and communications from the bank to the client remain strictly confidential and privy only to the client concerned. This is where rule number one in relationship-building between a bank and its customers is based — on a popular folk statement; which goes something like: Don’t lie to your lawyer, don’t lie to your doctor and of course, don’t lie to your banker!

Providing false or inaccurate information to your banker deliberately or otherwise will give the impression that you are a dishonest customer. Your banker may not say so when they find out that you gave in false information, but it will affect how they make decisions that affect your relationship with the bank. Ultimately, if your bank gets to know that you lied about certain things in your account opening forms or subsequently in your credit application, they may decline it entirely or if they grant you banking facilities, they will treat you with suspicion for a long time. That is not a healthy relationship. So keep to the basic truth when engaging with your banker. Giving your bank accurate information puts them in a position to assist you with the correct product or service.

How far can you bug your bank?

When entering into a relationship with your bank, ask, ask and ask again about any issue that may be unclear to you. This helps you provide accurate information to your bank in line with the discussion above. Asking questions is a good habit. Don’t pretend to understand a product, when you’re not so clear. Ask your banker to clearly state what your obligations under the product or service are as a client. Ask how you will benefit from the product or service, and most importantly, be very clear what it will cost you to access the service or product. This will limit misunderstandings between you and your bank in future.

How can you cultivate a long-term relationship with your banker?

While banks are in business to make money, they are also very good at advising their clients how they can save money and the cut cost of doing business. Not surprisingly, your banker is the best placed person to advise you how to cut the costs of using bank services.

Banking today goes far beyond the traditional role of providing deposit and loans facilities. A good banker is involved with the client in all of the movements of their money and will provide guidance on how you, as a client, can get the best financial advantage, so you can get the most return on your funds.

A good banker will save you money in service fees, help you to assess the credit-worthiness of your prospective customers and advise you on your own business’s health by analysing your cash flows, balance sheets, assets, receivables and payables.

Is it all just about the money?

Not really! There is more to a banker-customer relationship than just the money. If you choose your banker carefully, you will get more than just a loan — you will get a strategic partner. But like any good relationship, it takes a lot of effort to keep it sound.

Treat your banker like any other valuable client or strategic partner.

The best banking relationships are based on proactive communication. By establishing a pattern of regular communication — and not just talking to your bank when you need something — you build a lasting relationship. It tells the banker that you’re more than just a fair-weather client.

You will save a lot of time when preparing for your annual loan review because you won’t have to re-educate your banker on your business or financial affairs as you will have kept them involved all the way.

l Clive Mphambela is a banker. He writes in his capacity as Advocacy Officer for the Bankers Association of Zimbabwe (BAZ). BAZ expressly invites other stakeholders to give their valuable comments and feedback related to this article to him on clive@baz.org.zw or on numbers 04-744686, 0772206913