As a business owner, you understand the value of building loyalty and trust.

Relationship banking can facilitate opportunities to
get to know your local business community.

It’s not just beneficial for your business – it also enhances your customers’ experience and perception of value. You and your customers can enjoy long-term benefits when you cultivate a
deeper connection. The same is true for your relationship with
your financial institution.

In this article, we’ll explain what relationship banking is, how
it works, how it differs from traditional banking, and some
of its key advantages.

What Is Relationship Banking?

Financial institutions that adopt the strategy of relationship banking aim to be a one-stop shop for all their customers’ financial needs. The rationale behind this strategy should be familiar to any businessperson: retaining and developing customers is far more cost-effective than acquiring new ones. To successfully cross-sell their products, institutions need to closely analyze clients’ desires and expectations, offer meaningful incentives, and prioritize top-notch customer service.

Relationship banking also goes beyond the product to provide informational resources and expert advice designed
to support account holders’ long-term success.

All of this means that relationship banking can really pay off for you, too.

How Does Relationship Banking Work?

Relationship banking rewards loyal customers with customized solutions, exclusive rates and discounts, and other valuable perks.

Some of these perks are explicit, like savings accounts that allow you to unlock a higher interest rate when you have a certain amount of debit or deposit activity in your checking account. Other perks are more implicit, like the potential for arriving at more favorable lending agreements based on a transparent track record and an established rapport. For institutions and account holders alike, the best rewards arise from active and ongoing engagement.

As a small business owner, you can make relationship banking work for you by proactively communicating your needs, goals, and concerns.

Relationship Banking vs. Traditional Banking

Compared to traditional banking, relationship banking takes a more holistic approach to customers’ financial journeys.

Traditional banking is often described as “transactional,” meaning that the focus is on one-off products, services, and functions. Under this model, value propositions tend to highlight specific rates and features, and there’s a big emphasis on efficiency and speed. This appeals to some business owners who are looking for short-term maximization of savings or earnings in a single key area and who aren’t looking for a multifaceted partnership.

But for those who would prefer to explore an integrated ecosystem of products, services, and resources with more opportunities for individualization, relationship banking is the way to go.

Advantages of Relationship Banking

Here are some of the key benefits of forging a closer partnership with your financial institution:

• Attentive service: As a familiar face, you’ll receive a warmer welcome when you bank in-branch and know who to go to for quick resolution of any issues or questions.
• Strategic advice: When bankers and lenders gain a more complete picture of your circumstances and objectives, they’re able to offer more relevant guidance.
• Individualized solutions: A financial partnership built on trust and understanding can lead to custom-tailored products and flexibility on terms.
• Exclusive rewards: From lower rates on loans to higher rates on deposits, you may be eligible for a variety of perks based on the length and strength of your relationship.
• Faster decision-making: If lenders can see all your assets and transactions in one place, they can more accurately and swiftly confirm your creditworthiness.
• Networking possibilities: Relationship banking can facilitate both formal and informal opportunities to get to know your local business community.
• Everyday convenience: When you consolidate your banking under one roof and one digital platform, you’ll save time whether you prefer to transact in person or online.

Work With a Partner You Can Trust

To learn more about how relationship banking can deliver savings and insights, consult your financial institution.