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Serving Small Business with Treasury Management


In today’s sluggish economy, small businesses have not been showing much appetite for taking out loans, although there have been recent signs of a thaw. This provides a challenge for bankers seeking to build their small business customer base. What products can you provide to attract them?

One answer is Treasury Management, those back-office, behind-the-scenes services that enable small businesses to make and receive payments from customers through their financial services provider. “Treasury management solutions are those that will allow a company to focus on its core business, while someone like us can take care of the banking part of it,” says Colleen Taylor, executive vice president and head of treasury management & merchant services for Capital One Bank.

We recently interviewed Taylor to learn more about what small businesses really need from their banks in this strained economic environment.

Q: From your perspective, what kind of treasury management services are small businesses looking for nowadays?

Taylor: It’s all about making companies more efficient and effective. Treasury management solutions are those that will allow a company to focus on its core business, while someone like us can take care of the banking part of it. “How can I pay more efficiently and how can I collect from customers more efficiently?” is a major concern.

Many small business owners look for things like commercial cards to purchase office supplies at a store like Staples. I also see them looking for merchant services, either for in-person purchases or to use over the Internet. And there’s interest in remote deposit – you’ve got checks coming in but you don’t want to spend the time going to the bank. Wouldn’t it be great to take a picture of the check on your cell phone or scan the deposit and get your deposit value quickly and easily?

It’s also important for customers to be able to go into their local bank and talk with the small business banker or go online and get educated. We have to take a multi-pronged approach to educating a small business owner on how to be more efficient and use new tools to make their lives easier. We do that with internal training programs and news flashes. And when they sign in to our online banking tool, there’s a little “hint for the day,” with contact information on how to call us and learn more. We also do a lot of trade forums and roundtable discussions, where experts can demo a new piece of equipment and explain how it works.

Q: What can banks like Capital One do to help small business owners with data security concerns?

Taylor: It’s important for small business owners to understand these risks and how to protect themselves. The number of fraudulent transactions is on the rise and the effects of this on a small business could be devastating.

We’re trying to educate through trade magazines and other media about what you need to do as a small business to be protected. Those measures include, for example, being mindful of where you have account data and secure passwords and never giving them out; beware of e-mail requests asking to confirm your password – that’s not something a bank or a valid trading partner would do; protecting your check stock – the information at the bottom of a check could be used for wire transfer; and covering the basics with your computers, such as having an adequate anti-virus software in place. When you sign in to your bank account online, you need to pay attention to notifications from the bank. Most of these are common sense tips.

Q: What sort of digital/automated treasury management services should small businesses be looking at?

Taylor: Everybody wants to do everything on their phones nowadays. They’re looking for banking services delivered by mobile devices, phones or tablets, looking for things like, “Can I access my banking information just to get balance levels and a recent transaction history?” They’re also looking at transactional banking, such as initiating a wire transfer, a person-to-person transfer or a small business-to-business transaction. They want to take a picture of a check and scan it in as a deposit. They’re looking to have an electronic device play a more important role in daily business so they don’t have to go back to the office to transact business.

For example, a small HVAC company sends people out on service calls. Wouldn’t it be great if they could use a mobile device to process a credit card or a check from a customer? Those are the kind of efficiency tools we’re looking at so you don’t have people running around with credit card receipts and paperwork. This kind of technology is just now becoming available and we are excited to see how business owners respond.

Q: What sort of continuity plans should small businesses have in place?

Taylor: Owners should keep the names of key employees and bank contacts in paper form as a standard business continuity practice. They should always have an alternative to Internet access.

Consider, for example, how the September 11, 2001 terrorist attacks impacted businesses in New York City. Mobile phones didn’t work, but landline phones did. A lot of small and large companies now insist on having access to non-digital, analog phone lines. And backing up key data is important. The world will change if there is a disaster.  You have to go to the old fashioned paper access for important information.

The other day, a customer called in who couldn’t remember his own account number. We went through security checks with him and helped him recover the information. He was used to dealing with everything online and yet still couldn’t give us his 10-digit account number. I think everyone’s in the same boat. If I had to call my sister today, I wouldn’t know her number off the top of my head. You still need a paper reference.

It’s worthwhile to update your contact list annually and make sure signatures are appropriate and accurate. As a large company, we do extensive annual contingency planning. I encourage small businesses to think the same way. It’s worth spending a morning updating your information. Make sure there is a binder with this information, and another binder in an off-site location. It’s important to know where that information is.

Mr. English is a freelance writer based in Chicago.