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HOUSTON BUSINESS REVIEW

Relationship Banking: Is it right for you?
By Jim Stein

Mr. Stein, President and CEO of Bank of Houston, is a frequent guest and co-host of the Houston Business Show. His extensive knowledge and experience has helped him to serve in senior bank officer positions and on the Board of Directors of Columbus State Bank, Central Texas Bankshare Holdings, Inc., Texas Bankers Association, Momentum Capital Corporation, and Bank of Houston.

For more information on Bank of Houston and Mr. Stein, please visit their website at www.bankhouston.com.

In this world filled with many different choices, it’s hard to find what is right to fit your needs. The same is true for banks. There are so many different banks with numerous products that it can get confusing sometimes. So what exactly is a relationship bank and how do I know if it is right for me?

Generally, banks are categorized into two different types: retail or relationship. Retail banks tend to be larger banks that focus on volume. Convenience is an advantage for retail banks, whereas building a connection is necessary for relationship banks to survive. Relationship banks are usually locally owned and embedded in their communities. The hands-on management style and local decision-making authority help ensure individualized service to customers and businesses. Relationship banks have the ability to spend more time focusing on the needs of small business owners and building a relationship with them. Flexibility in structure and pricing is another advantage smaller banks can offer.

Finding a banker who understands your industry is a necessity for your business. A banker who is experienced with similar businesses can serve as a sounding board and source of valuable advice and consulting expertise. A smaller community bank may have more flexibility to work with businesses with special needs than the larger, stricter institutions.

So is a relationship bank right for you? It just depends on your situation and what exactly you are looking for. If you are looking for a bank that has that personal touch and will understand your needs, then a relationship bank might be the right choice for you. Knowledgeable bankers who have local decision-making authority can make all the difference with your banking experience. Even though a smaller community bank may not be ideal for everyone, it could be the perfect fit for you and your situation.