The Internet is teeming with offers of credit-card processing services, loans and other products geared toward small businesses. But KeyBank plans to deliver something that business owners may not find online: trustworthy advice. This year, the bank is rolling out a program to certify 300 of its frontline employees as small-business experts.
"We're just trying to increase their acumen so they can think more broadly about what their clients' issues are," says Maria Coyne, executive vice president of the branch network for KeyBank, the main subsidiary of Cleveland's KeyCorp.
For example, Coyne says, a business owner may come into the bank asking for a loan, but a trained relationship manager might determine that what the business really needs is a better tool for managing cash flow.
KeyBank, which defines small businesses as having up to roughly $3 million in annual revenue, is not alone in taking a more consultative approach to serving this segment. Ronald Balmer, a principal at Greenwich Associates, a financial services research and consulting firm in Stamford, Conn., says about half of his current clients are engaged in some kind of training in the area of business banking. "That is probably a 90 percent jump over what it was in 2009, 2010," he says.
More than pitching loans, bankers today are increasingly expected to help their clients solve business-related problems. "You used to be a loan officer," Balmer says. "Now I need to make you into a trusted adviser."
But training alone may not be enough to accomplish the goal. If banks want to succeed in the small-business market, they also need to tweak employee credit scoring and other internal practices, says Charles Wendel, president of Financial Institutions Consulting, a New York firm that specializes in small-business and commercial banking. He also says banks must reward employees for the new activities they are expected to pursue.
"It's very easy for banks to put money into training. They feel good about it. It touches a lot of their employees. It seems like an active, positive thing. And it often is," Wendel says. "But much of the training is often not followed up on, or you don't have infrastructure to support what the training is for."
KeyBank executives say they have a longstanding commitment to serving small businesses, a commitment that did not wane during the recession. The bank, which has $89 billion in assets, has employed small-business specialists for about 10 years.
As the economy recovers, the bank wants to position those specialists as credible advisers, says Dennis Devine, executive vice president of KeyBank's consumer and small-business segment.
The certification program is required for all small-business relationship managers, and for branch managers at some of the 300 branches KeyBank has designated as "business-intensive," representing nearly a third of its 1,000 branches, Coyne and Devine say. Others can request the training.
Participants will take online courses, attend classroom sessions and gain firsthand experience by going on client calls with colleagues who already have expertise in particular business lines. To finish the training, participants will have to complete transactions involving products such as loans, credit lines and cash-management tools.
Certification must be achieved by the end of 2013, but participants can follow their own training schedules. Bankers' participation in the program and their use of the skills they pick up will become part of their annual evaluations.
A key aspect of the training, Devine says, is to help small-business relationship managers engage in structured conversations with their clients, touching on issues such as cash flow, planning for growth and the role of credit.
"The fact of the matter is that every one of these small businesses, they do have significant financial needs and banking needs," Devine says.