Since the early 1990's the Canadian banking sector has undergone a service revolution and has moved away from trying to satisfy all its customers with a "one-size-fits-all" approach, which didn't really fit. Instead, thanks in large part to new information technology and a greater ability to process information and data quickly, today's top banks can provide tailored financial services designed to meet the specific needs of each of its customers. So what does this mean for you? In a word: savings.
First, if you haven't thought about your banking relationships for several years you should do so now. Doing nothing can be extremely costly. It is important to establish a process to regularly assess your current financial needs and the services offered by your financial institution to ensure that they both are in line with current best practices for the industry. You or your business will probably have some specific banking and financial management needs and/or preferences. But you must identify what they are.
Second, accept the fact that there is only one person ultimately responsible for ensuring that your financial management needs are being met in the best and most cost-effective manner. That person is you not your banker. Most certainly, your banker should be there for advice and answers, but your role is to know the facts and ask the right questions.
Third, when operating a business account, your concerns with cash-flow and/or use of money - accounts receivable, accounts payable, investments, cash, operating expenses, etc. are important but you must also commit to a periodic review of your banking needs and processes. Too often business owners focus almost exclusively on loan interest rates with the presumption being that if one gets a "good rate" then they must have a good banking arrangement. "This is not necessarily the case." say's Kathleen O'Neill, Executive Vice-President of Business Banking at BMO Bank of Montreal.
"You should review all your banking relationships
based on the entire financial services package rather than one element
alone. Business banking can be complex and businesspeople should explore
options and opportunities to improve operating efficiencies, reduce fees,
and manage cash flow." "The same is true for your personal banking
accounts." say's David Newman, Director of Information Services,
Fiscal Agents, Financial Service Group, Oakville. In other words, look
beyond the obvious when dealing with your banker and make sure the services
are tailored to your specific needs. Also review the costs of your credit
card add-on's. For the most part the bonus points and/or air miles attached
to premium cards are items you're actually paying for! If you have money
on deposit or a loan, compare the interest rate against what's on offer
at other financial institutions - earning more and paying less is the
name of the game. Also, many banks offer fixed cost monthly packages that
can significantly reduce such things as ATM fees for frequent users of
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, Fiscal Agents Money Management Newsletter