When personal financial management (PFM) began to weave its way into the banking industry, both consumers and the financial institutions themselves were skeptical. Consumers did not fully understand and trust this new service, while banks and credit unions struggled to find a way to adjust these tools to their products and make them attractive to the consumer. The PFM tools were born with the objective of presenting the accounts, the balance or the financial operations in the client’s language. Toronto’s Sean St. John has spent the last 25 years of his professional career working in the banking and financial industry. Sean St. John currently serves as the Executive Vice President and Co-Head of Fixed Income, Currencies & Commodities at National Bank Financial in Toronto, Canada.
The Importance of Banking Relationships for Companies:
- Nowadays, it is not easy to understand the development of business activity outside of banking support.
- In most cases, companies are not in a position to finance their own development, or simply to meet the specific requirements of liquidity with the cash-flow they generate. Under normal conditions, it would not be appropriate for them to finance all their fixed and circulating assets exclusively with their own funds and with the financing obtained from their suppliers.
- In many cases the treasury situation of the companies is surplus, and they are the ones that channel and “lend” the money to the financial entities to make it profitable, obtaining the banks their profitability, fundamentally, together with the income via commissions for the provision of services, thanks to the differential between what they obtain in the markets of their investments and what they pay their clients for that “transfer” of funds.
- However, the idea that bank-company relationships are not carried out on an equal footing seems to be consolidated, since normally banks are supposed to, or even adopt, superior aptitude that facilitates the imposition of valuation conditions. And interests in front of the company. Negotiations rarely take place at the same level, despite the fact that financial institutions owe their existence and obtain their profitability from their relationship with companies and their clients.
- The financial managers of the companies are aware of the importance of their negotiating capacity with the banking sector and devote great efforts to implement techniques and strategies, based on knowledge of the market, financial institutions, the operation of the sector they belong to your own company and your present and future needs, help you achieve the objectives that the financial department and your company have set as goals.
- In this context, the treasurer watches over the economic viability of his company and his main objective must be to obtain the bank financing volume that he needs for the perfect development of his activity at the lowest possible cost. It must also ensure the attainment of maximum possible profitability in its treasury surpluses, laying the foundations for the continued progress of a stable and lasting relationship with its banking entities, based on mutual trust and the clarity and transparency of its negotiations, taking charge of also to control compliance with the agreed conditions and the established agreements.