By Stephen DuMont
When looking across any industry or sector, one attribute often separates the highest-performing institutions from the rest: the presence of key trusted partners. These trusted partners perform important functions for their higher-performing clients and while the functions they perform may be different, there is one important trait in common. That is, these leading institutions rely upon trusted partners that provide consistent holistic insight informed by their overall knowledge of the client and the key stakeholders impacted by any decision. Any vendor can attempt to sell products in its inventory. The trusted business partner will work closely with the client to identify its goals and then make recommendations based on an understanding of the institution’s unique financial situation. The solutions provided to the client are not constrained by the inventory of their firm, but rather informed by their understanding of their institutional partner.
Never has this trusted partner been more important than in today’s banking environment. Today’s bankers are grappling with low interest rates, economic volatility, ever-increasing and changing regulation and a host of other issues. Working with an informed, trusted partner who exhibits knowledge of their field and the support of a knowledgeable team is more important than ever. In particular, the current zero-bound interest rate environment requires a different type of thinking when it comes to “banking as usual” – one that relies upon a balance sheet perspective and the ability to adapt quickly to a macroeconomic climate that tests long-held assumptions as to how a bank ought to operate. A trusted partner insightfully addresses needs across your balance sheet, aware of the unique attributes of your institution, and provides timely solutions from that vantage point.
Across the country, and especially in the Midwest, many community banks service the agricultural economy. The current economic climate with a strong dollar and weak commodity prices are causing these ag bank balance sheets to shift. Loan demand is high and managing liquidity and sources of funds is more important than ever. A trusted business partner anticipates the impact of such trends and is one step ahead in terms of what comes next in the economy and its likely impact.
There is a critical difference between a product-focused vendor and a client-focused trusted partner. The product-focused vendor considers the sale of an instrument, or product as an isolated transaction, but a trusted partner weighs each transaction through the lens of their client’s objectives. When it comes to investments, the trusted partner identifies the securities that enable their client to meet the goals of their portfolio and not merely the bond receiving the most hype on any given day. A trusted partner focuses on building a long-term relationship with their client, as opposed to simply making a transaction today. The trusted partner views their client’s success as their own.
In today’s internet age, data is usually just a few clicks away. Trusted partners take advantage of readily available information to understand their clients and rely upon ongoing dialogue to keep pace with the ever-changing needs of the institution. Trusted partners go the extra mile to understand the unique needs of their clients, and equipped with that understanding deliver solutions tailor-fit to each client.
It often can seem difficult to find a trustworthy partner. There are many vendors, but far fewer trusted partners. One of the reasons that trusted partners are difficult to find is a matter of human nature. Humans frequently demonstrate a tendency to operate from self-interest. A trusted partner understands that the best route to success for both the client and themselves is through consistently emphasizing the interest of others and exhibiting a “listen first” attitude.
At this point, it may be clear, it is in the banker’s best interest to work with a trusted partner. The challenge is separating the trusted partners from the rest.
Stephen DuMont is investment officer, UMB Bank, Kansas City.