Agenda 2 New Environment and New Technology 1. P Preparing for - - PDF document

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Y N D it C t t Your New Depository Contract Making it Work for Your District

Presented by BBVA Compass

Robert McDaniel City President Robert McDaniel , City President Gina Lobato, Public Funds Relationship Manager Melissa Leal, Treasury Management Officer

1.

New Environment and New Technology P i f th RFP

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Agenda

2.

Preparing for the RFP

3.

Making the RFP Your Own

4.

Evaluating the Responses

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Objectives

I t b t ti i t RFP’

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• Incorporate best practices into your RFP’s
• Enhance success with RFP’s for Banking

Services

• Understand the Bank’s perspective
• Create a mutually beneficial RFP

The Current Environment

1.

Historically low rates

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Cost containment is “job one”

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2.

Cost containment is job one

3.

Followed immediately by revenue enhancement!

4.

Regulatory changes

• Collateral requirements
• FDIC coverage

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Increased paper and electronic fraud

5.

Increased paper and electronic fraud

6.

Technology fuels change—and addresses risks in the current environment

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Changing Technology

Efficiency and Cost Containment

• Payables outsourcing—paper electronic and wire

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• Payables outsourcing—paper, electronic and wire
• Paper to electronic conversion
• Vendor payments via commercial card

Enhancing Receivables

• Internet payments
• 21st century lockbox
• Check image processing

Fighting Fraud

• ACH blocks and positive pay
• Payables outsourcing

Look Back to Prepare for the RFP

Conduct a “WWW” review of your current depository relationship, and prioritize:

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relationship, and prioritize:

• What’s Working

Service Functionality Relationship Value

• What’s Not

Identify product and service gaps Quantify concerns about value

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Look Ahead to Prepare for the RFP

Continue the “WWW” process by considering:

• What’s Next

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• What s Next

Economy/revenue Expansion New technology New investment options Regulatory changes Regulatory changes

Prioritize and Define

• Must Have’s!

Keeping what works

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p g Improving what doesn’t work Meeting regulatory requirements

• Wants

Improving what works Preparing for the future

• We’re Exploring

Adding new technology Changing processes

Stay focused on the possible!

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Help Your Banks Prepare Better Responses

More information = better, more accurate pricing!

• Provide volumes wherever possible

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• Provide volumes wherever possible

“Blind” account analysis statements Historical transaction volume and balance data Listing of all services

• Share balance information

Interest bearing vs. non-interest bearing Use average balances vs. one point in time

• Share your account structure
• Share strategic plans that impact your depository relationship
• Provide your most recently approved Investment Policy

Tailor the RFP to Your District

• Highlight “must have” services and features, such as:

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• Fraud protection for paper and electronic payments
• Local cash vault services
• Direct deposit of payroll
• Local lockbox site
• Ask for additional information in the sections that

dd “ ” Th ld i l d address your “wants”. These could include:

• Moving away from paper payments
• Adding deposit alternatives
• Offering internet payment options

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Tailor the RFP to Your District

• Give direction on what you are “exploring”. Are you

id i

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considering:

• Enhancing your purchasing system
• Converting to a new ERP system
• Outsourcing payment services
• Ask for new ideas and suggestions—free consulting!
• Technology is changing rapidly
• Innovations improve efficiency
• Alternatives may be more cost-effective

About Merchant Services and Commercial Card

• Merchant Services

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• Consider a separate RFP for this service
• Be sure to include a current merchant statement or equivalent
• Commercial Card Services
• Good for gathering general information about the providers’

capabilities

• For pricing and vendor selection, strongly recommend a separate RFP

V d hi i b i i Vendor matching process insures best pricing Program structure should be a tailored to your accounting system Trend is to move to a two pronged program: distributed cards and vendor purchases

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Evaluating the Responses

• Develop criteria such as:

Expertise Safety and Soundness

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Range of Products Market Presence Dedicated Team Rates/Pricing

• Research bank ratings
• Fitch
• Moody’s
• S&P
• Bauer Financial (www.bauerfinancial.com), IDC Financial Publishing
• Include your criteria in the RFP
• Ask for references
• Consider presentations by finalists
• Include product demonstrations
• Especially important for new products and services

Keep Your Consultants

You may receive several good bid responses, but you can

• nly pick one…

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• nly pick one…
• Keep the next best 1 or 2 on your “consultant” list
• Meet with each several time a year
• You will get new ideas
• You may find a vendor for a new financial service such

as Merchant or Commercial Card

• You will have several good banking relationships before

your next RFP is due