Treasury trends: bank relationships & bank report cards.

Remote deposit capture, which allows organizations to deposit checks by scanning them and transmitting their information directly to their cash management bank, was a clear leader in a recent survey as the bank service that is going to be adopted the most this year.

That was a key finding from the TreaSolution Cash Management Survey, introduced in this column in the last issue, which covered treasury technology, treasury staffing, bank relationships and bank report cards. This month's column covers results pertaining to bank relationships and bank report cards.

Approximately 100 corporate practitioners participated in the survey by Chicago-based TreaSolution, a treasury consulting firm. Of those, more than 75 percent hold the title of "manager" or higher; and more than half were from organizations with more than $1 billion in annual revenue.

Bank Relationships

The survey asked corporate managers questions geared towards discovering which banks were most popular, which cash management services are most desired and what relationship exists between an organization's credit facility and its cash management banking relationships.

The most commonly used cash management bank was JPMorgan Chase and Co., with 23 organizations naming it. The second most commonly used cash management bank was Bank of America Corp., with 16 organizations naming it. An interesting survey result indicated that if Bank of America is successful in purchasing LaSalle Bank, it will be nearly tied with JPMorgan Chase as the most popular main cash management bank. (Editor's note: Bank of America is bidding to buy Chicago-based LaSalle as part of the complex deal between competing bank factions to buy ABN Amro, the Dutch banking giant that owns LaSalle. At press time, the fate of that bid was not certain.)

Cash Management Product Adoption

As noted earlier, the survey found that remote deposit capture was the cash management product most likely to be implemented within the next year. The remainder of the top five were: payee positive pay, bank treasury workstations, electronic billing and payment and payroll cards.

With remote deposit capture, checks can be scanned and deposited from any location (point of sale, headquarters, etc.), and the cash management bank does not have to be located near the client's scanning location. The practice offers many benefits, and it's understandable why many treasury practitioners want to implement this service soon.

Credit Facility's Influence on Bank Relationships

Treasury managers were asked if their credit facilities influenced the selection of their main cash management bank. Just over 20 percent of the respondents indicated that their organization did not have a credit facility (in other words, an existing lending relationship with a bank or multiple banks).

Of those who did, more than 71 percent responded that their organization's credit facility influenced the selection of their main cash management bank relationship.

This indicates that many organizations are looking at their banking relationships holistically, as opposed to a department-by-department basis. Additionally, if an organization has a credit facility, it may not be as price-sensitive with cash management product pricing. On the other hand, many treasury practitioners consider prompt customer service, excellent product offering and effective product implementation just as important as product pricing.

Bank Report Cards

Respondents were asked to rate their main cash management bank in five categories: customer service, product implementation, product pricing, product offerings and cash management technology. Based upon the survey results, bank report cards were developed for each of the nine most popular cash management banks in the survey.

The banks listed with the most "excellent" ratings in each category were:

Customer service: LaSalle Bank

Product implementation: Wachovia Bank

Product pricing: Wells Fargo Bank

Product offerings: Wells Fargo Bank

Cash management technology: Wells Fargo Bank

This data represents a small portion of TreaSolution's Cash Management Survey results. All of the bank report cards and the other survey results can be viewed at www.CashManagementSurvey.com.

Daniel J. Carmody, CTP ([e-mail]), is Managing Director of TreaSolution, a treasury consulting and staffing company, and leads the company's treasury consulting practice.

Does Your Credit Facility Influence Your Banking Relationships?

                    Responses

No Credit Facility  21
No                  24
Yes                 59