Shopping Around

Retail experts tell me that German shoppers are somewhat different from their British counterparts. Apparently Germans like to buy different things from different stores. The British on the other hand prefer to buy from just one place. This generalisation is, I think, also true of banking services. Whether you are a retail customer, SME or larger business the attraction to use just one bank is obvious. It’s simple. But it may cost your dearly. Yes, shopping around will get you better deals but it doesn’t just stop there. Companies in particular need to consider how vulnerable they are when they rely on one main bank whether that is for loans, deposits, payments or hedging transactions. This concentration risk is only apparent when banks say “no”. A problem faced by credit worthy businesses as well borrowers in all product types from deposits and payments right through to derivatives. There is much talk of “challenger banks” but the truth is that a concentrated market place prevails. Widening your pool of banks has become a slow process. Even account opening is problematic thanks to regulation. With this in mind the corporate treasurer needs to look at the German shopper. Examine the marketplace. Know where to find things. Try different brands. Reassess the shopping list. Do you need all those things? This requires time and effort. Above all don’t stick to one shop only to find it shuts its doors when you least expect it.