We're frustrated with our bank. Should we move?
Frustration with a bank is often a symptom of a service model mismatch, not a pricing problem. Before deciding to move, figure out what is actually wrong with the relationship and whether another bank is likely to solve it.
Switching banks is not the same as opening another account. For a business, it can become a multi-month operations project involving payroll, payments, treasury services, merchant processing, borrowing and dozens of connections that have accumulated over time.
Before you start that project, make sure you’re solving the right problem.
Start with why you want to leave
If the problem is service, find out what service you’re actually supposed to be receiving.
Does your business have an assigned relationship manager? Does that person have any authority, or are they primarily there to route questions somewhere else? When something goes wrong, do you know who owns the problem?
If you’ve outgrown the service model your bank provides, moving may make sense. But make sure the bank you’re considering operates differently.
Many switches simply trade one call center for another.
The same applies if the frustration is pricing, technology, lending, or treasury services. Identify the specific problem first. Otherwise, it’s very easy to spend months changing banks only to discover that the thing bothering you didn’t materially change.
Inventory everything connected to the account
Before moving anything, make a list of everything connected to your existing bank accounts.
That includes ACH debits from vendors, direct deposit for payroll, merchant funding, card-on-file autopays, tax payments, lockbox services, remote deposit, sweep arrangements, wire templates, and any loan with an automatic payment.
Don’t assume you will remember all of them.
A useful place to start is several months of account activity. Look for recurring transactions and services that depend on the existing account or routing number. Every one of those connections becomes a task with a deadline during a bank conversion.
The checking account itself is usually the easy part. It’s everything connected to it that makes changing banks complicated.
Check your lending relationship before moving deposits
If your business also borrows from the bank, don’t treat the deposit and credit relationships as completely separate.
Your loan documents may require you to maintain deposits or your primary operating relationship with the lender. Moving accounts without checking those requirements can create consequences for debt you intended to leave in place.
Even when there isn’t a specific requirement, understand what moving the deposits does to the overall relationship.
If you have a line of credit, equipment financing, commercial mortgage, or other borrowing that you intend to keep, determine how the bank views the relationship before you move the operating accounts somewhere else.
The goal isn’t to let an existing loan trap you at a bank that no longer works for the business. It’s to know what you’re changing before you change it.
Compare capabilities, not just fees
Business owners naturally compare fee schedules when evaluating banks. Fees matter, but they’re only one part of the economics.
Look at what the bank can actually do for the business.
Positive pay, ACH debit filters, user entitlements with dual control, same-day ACH, remote deposit limits, reporting capabilities, and integration with the way your company operates can matter far more over five years than a $15 monthly maintenance fee.
The cheapest account is not necessarily the least expensive banking relationship.
A weak fraud control, an inadequate ACH limit or a treasury service that requires manual work every week can cost considerably more than the difference between two fee schedules.
What should the new bank actually do better?
Before choosing another bank, turn the reasons you’re leaving into requirements for the next relationship.
If service is the problem, understand who will own the relationship after the account is opened.
If lending is important, understand where credit decisions are made and whether the bank has the capacity to support the business as it grows.
If treasury services matter, make sure the bank supports the way you actually collect, hold and move money rather than simply checking boxes on a product sheet.
And ask about implementation. Someone has to coordinate the move of accounts, ACH activity, payroll, merchant funding, treasury services, and user access. Find out who that person will be before the conversion starts.
A good salesperson can make almost any bank sound better during the courtship. The question is what the relationship will look like six months after the accounts are opened.
Plan the transition before you close anything
Don’t close the old operating account the day the new one opens.
For many businesses, I recommend running the old and new accounts in parallel for at least 60 days. Move activity deliberately and watch both accounts for transactions that were missed during the inventory.
Payroll deserves particular attention. So do tax payments, merchant deposits, loan payments, and recurring ACH transactions.
Close the old operating account only after you’ve gone through enough activity to be comfortable that nothing important is still trying to hit it.
The cost of running two accounts for a couple of months is trivial next to a missed payroll.
Not sure whether changing banks is worth it?
A Business Banking Review looks at the relationship you have today, what isn’t working, what you’re paying for, and what you would actually need from another bank.
The objective isn’t to convince you to stay or leave. It’s to understand whether changing banks solves the problem you’re trying to solve before you take on the disruption of moving.
You’ll get written findings you can use whether you ultimately stay, renegotiate the existing relationship or move somewhere else.