Business banking for this segment has changed significantly over the last 15 years, with the declining presence of high street banks, closure of local branches and the removal of dedicated relationship managers. Established businesses have become accustomed to an increasingly impersonal, inconvenient and poor value service. This lack of service has also created a knowledge gap, affecting businesses' understanding of how lending decisions are made, the due diligence banks carry out and how this impacts their ability to access banking products, such as current accounts. Looking for support, business owners often turn to their accountants to help them make sense of the banking landscape.
What does this mean for accountants?
Accountants play a key role in helping their clients make decisions about running their businesses. This includes how to improve their day-to-day cash management and working capital. In the short-term, looking at whether clients are receiving savings interest on cash balances or cashback on transactions, these benefits can make a meaningful difference to businesses over time. Reviewing fees on accounts and transactional charges over the medium-term is sensible. As is understanding whether clients are reliant on one banking relationship or whether they are multi-banked. Then over the long-term laying the groundwork for growth, helping clients understand and prepare for lending before the business needs it.
In a recent poll with over 170 ICAEW accountants, only 8% of respondents said they regularly and proactively discuss business banking with their clients. 46% said they discussed it reactively, if their client came to them with a question and 46% said they did not feel confident discussing it with their clients at all.
What steps can accountants take?
- Don’t assume all banks are the same – the rate of change and innovation amongst banks means it is helpful to review the products, rates, fees and the specialist niches they support. Being aware of what offering would suit your clients enables you to have a tailored and insightful discussion.
- Keep banking under review – asking questions and building the topic into your existing monthly or quarterly client meetings is important. This helps you to learn more about your clients’ current banking services and the experience they need.
- Update the KYC pack – keep key information about your clients up to date. This means you can quickly respond to any information requests and proactively communicate any changes to the bank. This prevents one person having the bank mandate.
- Lead by example – as a business, you can demonstrate best practice to your clients when it comes to business banking. Ensuring you are earning interest on savings, reducing bank charges you are incurring and de-risking your position by being multi-banked.
Business banking is a key discussion point for accountants. Where they can add additional support and immediate value to their clients, helping them to understand how they can access the banking they need.
