A cash forecasting application done the right way is an excellent way for a bank to improve its cash management offering to corporate clients. Big banks in particular have noticed this already.
In this blog entry I will list six reasons why every bank should offer a cash flow forecasting solution to its cash management clients.
It is a mistake to assume your clients have already fixed their cash forecasting. Even though forecasting has been a hot topic for years, it is still one of the key areas of development.
It is particularly timely for medium-sized and small companies, which have not had the resources to develop their cash forecasting.
A significant share of corporations is prepared to deploy a cash forecasting solution offered by a bank. This is an excellent opportunity to help the clients as the bank is already a trusted partner.
Large banks already offer cash forecasting solutions to their clients. This does not, however, mean that you should not join the fray. These banks often concentrate on selling the applications to large clients that are typically the most difficult cash forecasting clients. Besides, the big players often make it quite complicated to buy their applications.If you don’t offer a cash forecasting solution to your clients, another bank will.
In the worst case, you can lose the entire business of a client to a competitor.
A large proportion of your clients know they should improve their cash forecasting. However, they often lack the resources and expertise to do it.
By leveraging your position as a trusted partner of your client and offering a modern cash forecasting application, you are in a great position to solve a client problem fast and cost-effectively.
A bank can increase client satisfaction by solving clients’ problems. This, in turn, provides an opportunity to sell additional services to the clients.
Increasing the commitment of clients is a key goal for banks. A cash forecasting application helps you achieve this goal in two ways.
First of all, increased client satisfaction increases customer loyalty. A satisfied client is a not easily lured away by competitors.
And secondly, cash management banking solutions are typically used only by a tiny sliver of the clients’ organizations, mainly just by treasuries. Cash forecasting, by contrast, is an organization-wide endeavor. This effectively deepens the client relationship as it is much more cumbersome to replace a widely deployed solution.
Cash forecasting is an organization-wide endeavor. This effectively deepens the client relationship as it is much more cumbersome to replace a widely deployed solution.
Client satisfaction and a widely deployed solution are efficient tools to deepen client relationships.
Traditionally, it has been difficult for banks to get inside the processes of clients. However, a cash forecasting application is usually deployed company-wide. This opens inroads to even deeper cooperation in the form of e.g. consulting.
A cash forecasting application offered by a bank is deployed company-wide. This opens inroads to deeper cooperation.
You can upsell and cross-sell other banking services with cash forecasting. By e.g. integrating the cash forecasting with your eFX system, you can increase your currency dealing volumes.
You may notice something missing: revenue from selling the cash forecasting application to clients. In most cases, a bank reaps the largest benefits by using the cash forecasting application as a loss leader to get as many clients as possible to use it. This – obviously – is best done by offering the cash forecasting application at a very low price or even for free.
Next week I will describe how a bank can best offer a cash flow forecasting solution to their clients.