Building better relationships: 4 key takeaways for tech treasurers
Many treasurers working at rapidly-growing tech companies face a wide array of challenges. They are veritable fast-moving targets when it comes to providing services. And what works today may not work tomorrow.
Talking with high-growth treasurers as they looked ahead to 2019, what struck me was how important it is for them to have a strong banking strategy and to work with a partner that can provide comprehensive services.
Last fall, Bank of the West brought together, for the first time, treasurers from fast-expanding technology companies at Tech20 High-Growth (Tech20 HG). Our collaboration with organizer NeuGroup allowed Tech20 HG to provide a select group of treasurers the opportunity to meet and learn from peers from around the country representing all kinds of companies in the U.S. tech sector.
In the world of high velocity business, it can be a real challenge for tech treasurers to pause and reflect on what banking strategy will enable them to approach markets with the speed and efficiency they require.
Take a rapidly expanding company with global ambitions, entering several different markets in a single quarter or even a single month. Yes, they want to open accounts quickly, because without the accounts they can’t operate in those countries. At the same time, they need to be able to meet payroll, pay their vendors, and accept customer payment.
But in the rush to get things ramped up in 20 countries, they find they are partnering with 20 to 30 different banks, each with their own onboarding process and online banking system.
Most treasurers don’t want to find themselves in this scenario. It can be avoided by first stepping back and considering a banking strategy that supports rapid, efficient, global expansion guided by a single question:
“Does this bank have a global platform that would cover, at the very least, 80% of the countries my company wants to enter?”
Here are my four takeaways generated from the 2018 Tech20 High-Growth Treasurers’ Peer Group discussion that will help treasurers better leverage their banking relationships:1. Reassess new bank relationships. Companies outgrowing their incumbent banks and building a new bank may want to pause and reassess the banks, their capabilities, the commitments they offer and whether the staff assigned to cover their firm knows what they’re doing. 2. Access the A-team. When deciding on a bank, it is important to know the bench-strength of your banking partner. Tech treasurers frequently voice concern about losing access to familiar and truly dedicated coverage staff when migrating from commercial to corporate banks. To avoid being a little fish swimming in a big pond, be sure to gather the entire team of coverage and product bankers as part of your RFP so you know who you’ll be dealing with on a daily basis. 3. Own the banking relationship. Smaller growth companies often select banks, especially for mergers and acquisitions, because the founder has a previous relationship with the institution. Since these companies may not have experience with professional treasurers who are savvy with owning and managing bank relationships, it helps to have treasury educate the C-suite and board. Banks hired via friend referrals should be tapped for their actual capabilities. Don’t let the bank’s shortcomings hinder what needs to be accomplished. 4. Build to be bank-agnostic. Companies forming a bank group from scratch have more flexibility to change banks than those with long-standing bank relationships. But it isn’t always simple. A bank may suggest a host-to-host connection to speed up implementation and provide better end-to-end service. However, that may make it more difficult to switch banks.
I encourage you to review the full summary from the 2018 Tech20 High-Growth Treasurers’ Peer Group and also learn more about Bank of the West’s technology banking solutions.