How to work with your bank.

• Author: Manuguerra, Peter J.
• Position: Cash management services offered by banks - Includes related article

A unique bank evaluation program established by BP America has improved the cash management service banks provide and made treasury life easier.

Have you ever been involved in completing bank quality surveys or participated in banks' phone call market surveys? Have you felt that your company was not directly benefitting from these exercises? Have banks ever tried to sell you a new and improved service without really understanding what your needs are? Our treasury team at BP has experienced all of this, but we felt that such methods of communicating with banks were not effective. We weren't getting our message across.

So, in 1990, we decided to design and develop our own evaluation techniques to measure both the banks' performance and our service expectations. The process would allow us to identify more readily those banks that were meeting our expectations for the delivery of cash management services and to communicate with the banks how well we felt they met our needs.

Now, two years later, service levels have improved. The process has also made us more aware of who are the quality service providers. Banks that consistently perform below expected levels are weeded out, and those that consistently perform well are awarded business from displaced banks.

While many companies have similar programs, we believe ours at BP America is unique in at least three ways. First, it conveys to the bank exactly what is important at our company. Second, it compares the service quality of different banks. And, third, it recognizes people on bank staffs when they give superior service.

WHAT A BANK

EVALUATION DOES

What is the most effective way to evaluate a bank's services? Like many companies, we were being bombarded by surveys from so many banks that we hated receiving them. And even when the banks visited us to discuss the quality of their service, we could remember recent problems but not their performance over a period of time. Rather than repeat this process for each bank, we decided to introduce a single program that would communicate our needs to all banks.

After two years, we have identified eight major benefits from our bank evaluation program:

* Each bank learns just how good its service is.

* Our company confirms its expectations of a bank.

* The process enhances the return to relationship banking.

* Both parties have an opportunity to discuss strengths and weaknesses.

* Both parties can see how a bank's performance is rated against that of other banks.

* The process fosters communication and becomes a catalyst for change.

* The process also helps the bank marshal resources to address our problems.

* We can recognize bank departments and individuals who are performing well.

To prepare for a bank evaluation, we consider the following points:

* Which banks are we going to evaluate? All banks? Those which provide more services? Those whose total fees are higher?

* Which services are we going to evaluate? And is accuracy of content more important than the services being prompt?

* What will be our source of information?

* Who will be involved on the company side? They should be the users of the bank's services, not just treasury. Examples are accounts payable, accounts receivable, and credit.

* How often will the evaluation be performed? Quarterly? Annually?

* Who...