Back to Basics: Relationship Management 101

Back to Basics: Relationship Management 101 | Blog

In an era when high-tech tools are gaining traction and the threat of falling behind the digital adoption curve is a top concern, what does this mean for relationship managers and the high-touch service they strive to provide?

After all, an experienced relationship manager (RM) is a major competitive advantage for a bank of any size. The most advanced technology cannot replace the level of service and expertise of a skilled RM, but technology can empower these team members to take their performance to the next level.

Many experts view the economic outlook for 2024 with careful optimism and some even anticipate that demand for loans could rebound later in the year. For banks, this means now is the time to find ways to empower their RMs. The financial institutions that do so will unlock new growth opportunities while cultivating loyalty among the employees that meaningfully impact their institution’s bottom line.

To understand what it takes to succeed in relationship banking, this blog will examine the basics of relationship management and how the right technology can support RMs.

The Basics of Relationship Management

As one of the main points of contact with a bank’s key commercial clients and prospects, an RM serves an important role that requires a unique skillset to succeed. Many of these are considered “soft skills” but these skills are critical to building strong client relationships. In addition, RMs must deeply understand their clients, as well as the products and services their bank offers.

Among the most important skills RMs need to have include:

  • Financial Knowledge: Relationship managers work with multiple departments across the financial institution, so they need to have basic (and continue to build) knowledge of credit, compliance, banking products and services, as well as a broad understanding of local and national economic trends.

  • People Management: A relationship manager needs to be able to manage not only clients, but also the internal staff they work with. This may include coordinating with just a few people or dozens, depending on the size and the organizational structure of the financial institution, as well as the size of the client. A strong RM can navigate these organizational structures and work effectively with a variety of stakeholders, whether it’s a credit analyst, compliance, or a member of the leadership team.
  • Works Well Under Pressure: Relationship managers are held responsible when things go wrong, from an unhappy client to compliance issues. An RM needs to be equipped to handle these types of challenges without succumbing to the pressure.

Ways to Empower Your RMs

  • Provide Access to Actionable Data: Giving RMs access to useful market and client data, as well as meaningful industry insights, can help them better understand and anticipate client needs. This helps RMs more proactively identify and execute on relevant cross-selling opportunities. A customer relationship management (CRM) system is an excellent tool for this. With a CRM designed for relationship banking, RMs are able to capture and manage pertinent client and prospect information, including key contacts, call activity and touch history, products and collateral, sales opportunities, client classification and segmentation, client-specific relationship plans, referrals, and more.
  • Efficient Communication Channels: RMs are tasked with coordinating communication between multiple stakeholders, both internally and externally with clients. Meanwhile, they must also spend time networking and cultivating their presence in the broader business community to build a strong sales pipeline for their bank. This leaves little time for RMs to spend following up with clients for important documents and financial statements needed to approve and push through a loan request.

In fact, RMs in US commercial banks often can spend up to 60% of their time on internally facing manual, administrative tasks, which often includes compiling information from different sources of data and keeping up with client reminders according to a study by Boston Consulting Group. Financial institutions that make it easy to engage with clients through a secure, digital channel that supports more productive, transparent communication will certainly win more deals.

Ultimately, the most successful relationship managers combine a diverse set of financial and interpersonal skills with cutting-edge technology. This powerful combination is what truly enables them to excel. By leveraging the right technology, RMs can streamline processes like administrative tasks and data entry, freeing up their valuable time to focus on what truly matters: nurturing relationships and driving growth for their bank. When RMs strike the right balance, they're able to reach their full potential and take the success of the bank and its clients to new heights.

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