The week completed, 3rd July 2015

know your customer

 

The speed with which weeks disappear is truly astonishing and this week seems to have been a particularly busy one so has gone by in a flash. Much of my time is spent on the phone but this week it was good to actually get out and meet a couple of Midlands based businesses.

Seeing a business, watching the process in which they are involved and talking through finance requirements is an infinitely superior way to evaluate a business than simply using a phone. The advantages of face to face encounters are as applicable to a broker as they are to a lender.

Lenders, responsible ones, have a duty to visit their customers at the very least, annually. Not only is this a prudent exercise from a lenders point of view in providing a far deeper insight into the business than is otherwise possible but also is beneficial to the customer in understanding further the needs of the lender.

In years gone by banks would know their customers well, now many businesses cannot name a relationship manager so have no immediate point of reference. A while ago the banks began shifting relationships away from local branches or business centres, often to remote locations. Now, ironically many lenders operate KYC (know your customer) policies. These are largely used as verification exercises, checking the customer actually exists, property, assets and so on.

Having to give a name to a task that should be second nature almost guarantees that it doesnt happen as it should with the result that relationship banking and consequently relationship bankers are consigned to history.

In speaking to businesses it seems, anecdotally, many prefer to have a designated individual at their funder, to whom they can turn and who is responsible for the relationship. This is beneficial to both parties.

In all cases where we act as introducers to invoice financiers the prospective funder will meet, at least once pre-commencement, their prospective client. Ongoing relationships are managed properly, with allocated account managers enabling the development of mutually beneficial and mutually understanding relationships