In this blog we share 6 sure ways to lose your Treasury Management Officer (TMO). Community banks and credit unions nationwide are seeking experienced TMOs to help them increase business core deposits and fee income. But even knowing that Treasury Management Officers are in high demand, institutions continue to fail at keeping them. Why? Because they keep repeating the same mistakes. At the fundamental level, the leadership still does not recognize the value that treasury management services bring to their institution.

The challenges that TMOs experience are real, and they need the leadership’s attention. And we need to address these 6 six sure ways to lose your Treasury Management Officer.

Lack of support from leadership.

A successful TMO recently shared with me that the number one reason she was successful was because of the bank president’s support. Without his unconditional support to provide the tools, systems, support, and budget there would be no TM department. Unfortunately, we hear the opposite of this story more often than the success one.

Treasury Management is not a “one-person show.” It’s a team effort. And without the “tone at the top” and leadership’s support, nothing happens. To attract and retain top Treasury Management talent, you must provide the support needed to sell and support the services. Otherwise, your TMO will burn out and simply leave your institution. There are plenty of opportunities for them right now.

Lack of resources.

In addition to the “moral” support that comes from the top, TMOs need physical support too. Creating awareness about Treasury Management’s value is great, but without providing additional staff to help them, it won’t work. They need a separate person to implement the TM services and provide ongoing support and maintenance for TM customers. Otherwise, they will be at their desks doing just that and the sales pipe will dry out.

TMOs must go out of the bank and meet with business customers alongside the business bankers (lenders). The TMO’s role is a sales role (at the Officer level), not a support role. Leadership cannot and should not expect the same person to do the two separate jobs. It is unsustainable! Additionally, they need help opening the business checking accounts for the TM customers. This function typically takes place at the branches by having at least one person knowledgeable about TM business accounts. However, some institutions are opting to bring the account opening function to the TM department for efficiency and consistency.

Insufficient Training for TMOs.

Everyone needs training. If you’re promoting from within, the TMO needs specific training on how to sell TM services and how they work. They also need training on your processes, systems, policies, and risks that TM services bring. Additionally, they will need to be introduced to the institution’s business customers who may need TM solutions.

Similarly, if you bring in an experienced TMO from another institution, they need training on how “you do things your way.” They need to learn who to call for the various issues. And also work with the business bankers to be introduced to their business customers. Lastly, they need to get familiar with your business bankers’ portfolios to look for opportunities. As we mentioned above, TM is a team effort.

Salaries may be below market rates.

TMOs are part of the sales team for your institution and as such they should be paid accordingly. Often TMOs get compensated similarly to the operations or retail staff which is not at market rate. As most institutions experienced in recent years, the depository side is just as important as the loan side. In other words, liabilities are just as important as the assets of the institution’s balance sheet.

Without a strong core deposit base with low cost of funds, the Net Interest Margin deteriorates, which impacts Net Income. Therefore, ensure your HR department conducts market research on the TMO role and pay the TMO at market rate. Otherwise, you will lose your TMO.

Business bankers are not incentivized to sell TM services.

Another challenge institutions face is the lack of incentive plans for business bankers that include deposits and TM fee income. True salespeople sell what they’re incented to sell. If deposits and TM fee income are not included in their plan, nothing happens. They will focus on bringing in loans, which is what they have always done! And the cost of funds continues to increase.

Formulating a simple incentive plan that includes both loan and deposit growth goals as well as fee income produces results. Additionally, business bankers and TMOs learn to work as a team that focuses on bringing the customers’ entire banking relationship. And the added benefit is that your business customer feels your institution meets all their financial needs in one place. This is one of the main goals financial institutions have these days.

The institution may not offer the TM services that business customers expect.

Lastly, just as important, you must offer a robust suite of TM services to meet your customers’ depository needs. Experienced CFOs, Treasurers, and Financial Managers of corporations understand the TM services and capabilities they need. Therefore, it is critical that your institution offers the most common TM services on the market. And if you service more sophisticated markets, you also need to compete with the TM services that national institutions offer. Otherwise, these businesses will simply not choose to bank with your institution, no matter “how nice” you are.

Along with the suite of TM services come the Account Analysis System and the Online Banking Platform you choose to use. Integration amongst all these platforms and with the core system is imperative for a smooth process and optimal service.

It’s our hope that this blog opens your eyes to the 6 sure ways to lose your Treasury Management Officer. If your institution doesn’t address these challenges, it is not a matter of if you will lose your TMO, but of when. But be encouraged! Most institutions we encounter these days are interested in doing the right thing regarding TM. Leaders are looking to increase awareness, support their TMOs, and provide resources to ensure their TM department is successful. In the end, it’s all about serving your business customers both with their lending and depository needs.

By overcoming objections to Positive Pay services, you create a win-win solution for both your customers and your institution. Positive Pay is one of the most valuable Treasury Management solutions your institution offers to businesses to prevent fraud. However, for some Treasury Management Officers (TMOs), it’s the hardest service to sell. Why? Because typically, business customers have five key objections to paying for this valuable service.

The best opportunity to sell Positive Pay to your new business customers is during the prospecting process. Both business bankers and TMOs must understand how this service works and who’s liable if the customer experiences fraud. In this blog, we discuss what the top five objections are and how you, as a salesperson, can overcome those objections.

Customers don’t think that fraud will ever happen to them…until it does.

Just like other accidents, tragedies, or natural disasters, people don’t think it can happen to them… until it does. Experiencing fraud in your accounts – whether personal or business – can feel like the world is ending. It is a horrible experience to live through and it can take even years to recover. Therefore, you need to learn about real life situations where others experienced fraud so you can share with your business customers. The idea is not to instill fear in them but to create awareness.

True Story: A business owner pre-signed checks and left them with the bookkeeper. One day, the business owner had an emergency and called the bookkeeper to pay a specific bill. The bookkeeper was on vacation, so she called her assistant to find the pre-signed checks in her desk drawer. She gave specific instructions to pay the bills, and the assistant did a great job. She paid the bill on time and the crisis was averted. However, she also proceeded to write a check for $3,500 to herself and cashed it. The next week when the business owner discovered that the money was gone from the account, he called the bank. In this instance, the bank was not liable because the customer signed a legitimate check. The customer was out the $3,500. With Positive Pay for checks, he would have found out the very next day and would have stopped the check from being cashed. These are the stories you need to share with customers to encourage them to sign up.

Too expensive.

The next objection is that Positive Pay is too expensive. A monthly fee of $25 to $45 is not expensive compared to the alternative of losing thousands of dollars. In contrast, Positive Pay is one of the most expensive services that institutions pay for. In addition to paying the providers, institutions also have the staff expenses. This is an expensive service to provide for your business customers and you should get paid for it. However, many institutions offer this important and valuable service for free. They claim that the expense of fraud is way higher than the expense to absorb the cost of Positive Pay. While that may be true in some cases, I disagree that it should be given away to customers. It is like a patient needing an MRI telling the doctors that they don’t want to pay for this service because it’s inconvenient and too expensive. Why should doctors give away MRI services when they invest millions of dollars on machinery plus the skilled staff? They shouldn’t and we all know they don’t. We all pay for our own MRI tests when needed.

Business customers need a tool to identify, prevent, and avoid fraud in their accounts. This takes the investment of time and money on their part. Your institution offers this amazing tool plus staff who train them and guide them through the process.

Customers don’t want to spend time uploading the checks issued batch files.

As mentioned above, it takes an effort from both the customers and the institutions to prevent and avoid fraud. If they are not willing to upload the batch of checks or ACH to ensure the institution only pays the authorized payments, then they should be responsible for fraudulent transactions. Many institutions are now requiring customers to sign a “Hold Harmless” or “Waiver” for those who refuse to use the Positive Pay services. When offered with this option from the start, most often they will agree to sign up.

They don’t like to be tied down to approve exceptions by the deadline.

Daily, the system matches the cleared items to the ones sent by the customer. All the “unmatched items” must be reviewed by the customer by a certain time in the morning. The institution does not pay these items unless the customer authorizes them to do so. Business customers need to spend time to approve or reject the checks or ACH transactions that clear daily. Although systems can override the payment authorization, this is unwise and defeats the whole purpose of the service. If customers set the system default to “pay all items without approval,” then they should hold the institution harmless.

Misconception that the bank will be liable for fraudulent checks or ACH transactions.

As shared in the above story, the customer was fully liable for the $3,500 check that was cashed fraudulently. Even then, the business banker wanted to “meet the customer half-way” and have the bank share the customer’s losses. Leadership denied the banker’s suggestion. Although, in this particular case, the customer actually signed a legitimate check, it could have been prevented. In most cases, customers experience true fraud, and it can be avoided by utilizing this Treasury Management service.

The key is education. Institutions must educate business bankers, their customers, and TMOs about Positive Pay. The entire team that services business customers must be knowledgeable about TM services and specifically on Positive Pay. Overcoming objections to Positive Pay services is challenging and it takes time but it’s worth it. The team approach is what will save thousands of dollars to institutions who are serious about preventing fraud and helping their business customers.

Need help with your Institution’s Treasury Management services? Let us know. We’re here to help.

Looking for resources to train your staff on Treasury Management? Our training system, TMClarity, solves your Treasury Management training needs.