Facing slower growth in middle-market banking, many corporate bank managers are still looking for ways to make relationship managers more productive.
But another role - that of the account administrator - has been relatively neglected. Few banks have fully developed that role or even understood what doing so could mean.
Account administrators, also known as administrative assistants or loan operations assistants, can serve as important adjuncts to the relationship manager. By taking on time-consuming administrative tasks, they free up the relationship manager to concentrate on portfolio credit quality or revenue opportunities.
Poor Use of Time
Some relationship managers spend as much as 40% of their time on "maintenance" activities - solving operational problems, completing money transfer and loan drawdowns, or answering routine customer inquiries.
While some of this involvement is necessary from time to time, an account administrator can complete much of this maintenance.
Typically, account administrators are people dedicated to the operational end of the business. They know how to get things done within the bank and can communicate well with operations people.
Account administrators should be viewed as "para-bankers" -- professionals who are partners in managing the customer relationship.
Easing the Load
Given enough training, an account administrator can:
* Coordinate loan bookings.
* Prepare customer correspondence.
* Act as first-line contact for middle-level customer requests.
* Review letter of credit documentation.
* By the initial customer contact focus to resolve problems.
The list can be expanded dramatically, depending upon how much management is willing to redefine the relationship manager's responsibility.
Account administrators can often handle more responsibility than they get.
The biggest reason they don't get more is that some relationship managers are reluctant to give up traditional tasks and accept increased responsibility in "higher value added" areas.
Every corporate banker knows at least a few colleagues who spend much of the day at terminals looking up data for customers, or on the phone solving operational problems. But most of these operational tasks could easily be completed by a lower-cost account administrator, who might very well be more experienced, too.
Ironically, in some banks the advent of the personal computer has actually led to some bankers being even more deskbound. The account administrator can often offer high-quality customer service at a lower cost for the bank.
Additionally, banks that have put into place an administrative support function find that an account administrator can become the point of continuity for account relationships.
While relationship managers tend to change jobs every few years, account administrators may remain in their positions for a much longer period. At a number of banks we know, their tenures average 8 to 10 years.
In some instances the account administrator has played an important role in eliminating corporate customer complaints about frequent turnover of account managers.
Some customers feel that as long as their account administrators remains in place and senior managements keeps in touch, relationship manager turnover is of less concern. They are confident that their day-to-day account operations are in good hands.
Resistance to Change
If the account administrator can play this important cost-saving role, and if the customer offers little if any objection, why have banks failed to strengthen this position or use it more widely?
Partly because many relationship managers prefer to perform maintenance tasks.
Some of this reluctance is traceable to concern over customer satisfaction. But much more results from relationship manager's unwillingness to take on more challenging tasks, such as the often dreaded activity of cold calling.
Remarkably, senior managers often make this situation more difficult by letting relationship managers definite their own jobs. Ideally, senior managers should set clear performance standards for them and account administrators, and should consistently measure performance against those criteria.
Many banks have taken the first step of instituting an account administrator-type position. However, detailed job definitions are ignored or often in effect rewritten by relationship managers or unit managers.
Direction from Top Needed
Until management responds to this situation by setting and enforcing jo standards, wide disparity in how the relationship managers view their roles will continue, hampering productivity gains and reducing potential fee income from cross-selling.
One banker at a major super-regional stated that it went against the culture of his bank to challenge relationship managers on what their role should be. At that bank, profits and productivity will be limited by this tradition.
Contrast this approach to that of a bank whose senior management has set account-productivity goals two to three times current productivity. A strong account administrator function was one important factor.
This bank has made a commitment to change. Senior management, going beyond the hope that relationship managers embrace the use of account administrators, seems willing to insist.
Extensive use of account administrators and reevaluation of the relationship manager's role offer a dramatic opportunity to reengineer the delivery of bank products and services.
This can lead to an improved cost base, higher fee income, and a better platform for long-term growth. But management must break with the past to gain these benefits.
Mr. Wendel is a vice president at Mercer Management Consulting Inc., New York.