Business

Cash management classes for banking customers

            Customers are the major assets of a banking organization and all other organizations in general (Fenstermaker, 1981). It is therefore important to make sure that customers are given the best treatment. In order to increase its profitability a banking institution needs to make sure that it retains its old customers and gain new ones. A bank can retain its customer by first making sure that it knows and understands its customer’s needs, and also by making sure it gives them the right service at all times. A bank comprises of either retail customers or corporate customers those in small and big businesses. When a bank gives a good service it does not have to market their services since a good service given to one customer breeds two or three more customers. The management of a Bank can give cash management classes to their customers as one of their marketing tool. Cash management involves training the customers how they can manage their cash. Cash in this case means the money easily accessible to them that makes them run their daily lives or businesses. Reports say that nowadays many businesses fail because of poor management. Many banking institutions have therefore adopted the cash management training mostly to their corporate clients. The main goal of these cash management lessons is to make customers understand the basic concepts of cash flow and help them plan for the eventualities that are foreseen in their businesses (Pycraft, 2000).

This research proposal requires the bank to offer cash management lessons to its customers, both retail and corporate customers. Account reconcilement services are necessary since checkbook balancing is one area that proves hard to large businesses. Monitoring checks that have cleared or not. Banks should provide classes to educate customers how to use services such as “positive pay” i.e. the systems that shows all the cleared checks and the ones that have not cleared on the customer’s bank statement at the end of the month. Banks have also introduced web services that allow customer access their accounts online. The Bank’s manager is the one who should authorize the credentials for login to ensure security. Some customers are not aware of armored car services whereby a bank can collect bulk money from their businesses using armored cars instead of risking taking it to the bank. Automatic clearinghouse is another service customers should be aware about, where they can be able to transfer money from their bank to another. Other services offered by a bank under cash management include balance reporting services, cash concentration services, wire transfer, zero balancing accounting, controlled disbursements among others (Back, 1997).

The research proposes that since some of these services are new to bank’s customers or if they are aware of them they do not know how they work or how they are useful to them. They propose that a cash management seminar should be held that stays for about 3 days. In this seminar all the bank’s customers whether they are retail or small or large businesses should be invited. The training should also include of bank staff and development managers. The seminar should be well advertised either through the media or through using pamphlets available in the banking hall or other well accessible locations.

Incentives like raffles, gifts, food and refreshment should be available to ensure most customers attend. In the training, the bank will have to sponsor should be the initial step to creating awareness. The training should be held by the bank and conducted by the banking staff and the managers. The bank can also hire financial expertise from financial consultants to give it a more professional look. The financial consultants will do all the arrangements of advertising, training and giving customer refreshments. According to the researcher the option of hiring the financial consultant as the first initiative works better because these people are professional and their work will be to ensure that the training is done well failure of which the bank will not pay them (Pycraft, 2000). The other advantage is that the consultants will offer good negotiation skills and concentration required as opposed to the bank staff whose main purpose would be to do their job and wait for their salaries at the end of the month.

The manager supported the proposal that cash management training would help the bank retain its customers especially during this time that the world was on the down turn economically. He agreed that hiring financial consultants was a good idea since they had expertise and the move would ensure that other operations do not go in to a halt because of the training. He however did not see the training being cost effective since it would mean the bank would use a lot of money to hire experts, which would reduce their profitability in the already bad financial year. He therefore proposes that the training to be postponed but the bank to undertake their own training through outdoor marketing strategies whereby they take their services to customers by perching tents, arranging their own seminars and making sure their corporate section employees advised the customers effectively. He also proposed added benefits and incentives to the staff that volunteered to arrange for the seminars. He proposed that the financial experts could be used to give advisory services but not to overtake the project (Jelassi & Enders, 2005).

In conclusion, cash management classes are important to the bank’s manager and researchers because it ensures that the institutions remains in business in this time where we have stiff competition with many institutions giving similar services. It is crucial for a bank to maintain a competitive edge that keeps them on top. Research shows that the only way customers can differentiate banks is by their products and their consultation and it can only be achieved through banks offering cash management training and advisory services. These training and advice can only be achieved through cash management specialists or relationship bankers. Cash management lessons would therefore ensure that the bank’s products remain in demands and make sure that sales staff and specialists deliver solutions to customers (Mehta & Fung, 2004).

References

Back, P. F. (1997). Corporate cash management: strategy and practice. Cambridge: Woodhead Publishing

Fenstermaker, J. V. (1981). Cash management: managing the cash flows, bank balances and short-term investments of non-profit institutions. Cambridge: Kent State Univ. Press

Jelassi, T., & Enders, A. (2005) .Strategies for e-business: creating value through electronic and mobile commerce: concepts and cases. Chicago, IL: Financial Times/Prentice Hall

Mehta, D.R., & Fung, H. (2004). International Bank Management. Malden, MA: Wiley-Blackwell

Pycraft, M. (2000). Operations management. Rosebank: Pearson South Africa