In the search for growth, ambitious commercial banking teams must look beyond the obvious candidates for clientele. The most stable, high-value growth can hide in plain sight. For example, municipalities make excellent clients, and they are often undervalued.
On the large side, a municipality could represent hundreds of millions in deposits and trust accounts. Even smaller municipalities have operating balances in the millions of dollars with thousands of transactions a month. The best practice as recommended by the Government Finance Officers Association is for municipalities to solicit bids for banking services every five years. Municipal requests for proposals (RFPs) are the gateway to winning these types of clients.
Although each RFP is unique to the municipality issuing it, they’re often looking for similar services at a favorable price. Don’t let that fool you into thinking that bidding on municipal business is a race to the bottom of the barrel. City CFOs are looking for the right package, including innovative solutions and services that can help the city save money or reduce manual processes. With the right tools, you can help municipal finance teams accomplish things they never imagined possible.
If you’re interested in adding municipal clients to your commercial portfolio, you need to learn what they’re looking for and how you can differentiate your institution from the competition.
Here are four things that you can do today to position your institution to win a municipal RFP:
- Analyze existing RFPs for banking services.
- You can find them by searching the internet and downloading the PDFs. Although the RFP you read may not apply to your location, many of the requirements are common to all municipalities. Another option is to request previous RFPs through your state’s version of the Freedom of Information Act.
- Get involved with the Government Finance Officers Association (GFOA) and the National League of Cities (NCL).
- Both organizations have annual conferences and resource libraries that will give you a much deeper sense of the challenges city CFOs face and how your bank can solve them.
- Look for ways to innovate outdated processes for the city.
- The COVID pandemic pushed a lot of municipalities to embrace digital banking tools and processes. Look for things in the RFP that you can make easier or more efficient.
- Explore the “approved vendor” process for the municipality in question
- It isn’t a guarantee of work the way a contract is, but becoming an approved vendor will give you important insights into how the municipality handles vendor relationships.
If you’re interested in learning more, check out our webinar on municipalities!