3 Key Factors To Consider When Choosing A Bank For Your Business
Choosing an open bank for your business usually entails weighing up options such as fees, services on offer, how close it is to your business premises, what customer service is like, and more.
Although these factors are valid, none of them alone should guide your decision. So what should be the deciding criteria?
That’s what we’re exploring in this article: the three most important things to take into account when choosing a bank for your venture.
Let’s get started.
Picking the right bank is like choosing a partner for a long-term relationship. Making the right choice from the get-go will save you lots of pain down the road. Of course, you can change your bank more easily than you can your partner, but it’s still a time-consuming process that’s worth avoiding if possible.
So, what are the elements that warrant a productive, long-lasting relationship?
The three pillars of any successful alliance are trust, understanding, and compatibility. Of course, there are many other factors to consider, but without these three things in place, the chances of success are low.
Trust can be built over time, but a solid foundation should exist from the very beginning.
First off, consider the bank’s reputation and ask around in your circles for people’s experiences. If this stage yields positive results, review safety measures that the bank should routinely employ, especially if online banking is important to you.
Cybercrime is on the rise, with 66% of businesses have experienced a cyber attack in the last 12 months, according to Ponemon Institute’s State of Cybersecurity Report. Adequate safety measures that are continually being upgraded will help prevent attacks and other security risks (these should include multi-factor authentication, SSL certificate management, firewalls, etc.).
Prompt customer service is just as important. Since cyber-attacks cannot be completely stopped, a quick response is crucial to minimize damage in case of a malicious breach.
One-size-fits-all solutions in banking rarely work well, so make sure to choose a bank that’s well-versed in your industry. If your banker is already operating within the market you’re in, they’ll be able to direct you toward valuable opportunities but also warn you of potential dangers.
A good banker can help you realistically assess the services you need at the current moment, and forecast others that you’ll be needing further down the line. This will help you assess if the bank can support you along the way so that you don’t outgrow it within a couple of years.
Creating a personal relationship with your banker is a must if you wish to extract the most out of your bank. It can also help if you experience delays in securing loan payments or want to avoid excessive fees.
In the rush of opening a business, you might feel compelled to go for the easiest choice and open a checking account in your personal bank. However, compatibility is very important when choosing a bank for your business needs.
For example, does the bank offer services you need, or the ones you’ll need later, as discussed above? Would you be better off with a large banking corporation or a small local bank? Big names usually mean security and a variety of options, but smaller banks are often more flexible in offering you favorable conditions for a loan or credit.
You could also look into specialist banks if you run a social enterprise, or explore private banks that offer bespoke services to better fit your needs.
Even though these are the most important aspects of a business-bank relationship, you shouldn’t stop there. Keep asking questions before committing to a bank, so that you can rest assured that you’ve made the right choice for your venture.
Try not to rush into a decision without careful consideration. Exploring all available options will allow you to secure the best solution for your business’s needs, the one that will keep your financial dealings secure and adapt to your growing business as needed.