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Your New Depository Contract Making it Work for Your District

Your New Depository Contract Making it Work for Your District. Presented by BBVA Compass Robert McDaniel , City President Gina Lobato, Public Funds Relationship Manager Melissa Leal, Treasury Management Officer. Agenda. New Environment and New Technology Preparing for the RFP

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Your New Depository Contract Making it Work for Your District

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  1. Your New Depository ContractMaking it Work for Your District Presented by BBVA Compass Robert McDaniel , City President Gina Lobato, Public Funds Relationship Manager Melissa Leal, Treasury Management Officer

  2. Agenda • New Environment and New Technology • Preparing for the RFP • Making the RFP Your Own • Evaluating the Responses

  3. Objectives • 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

  4. The Current Environment • Historically low rates • Cost containment is “job one” • Followed immediately by revenue enhancement! • Regulatory changes • Collateral requirements • FDIC coverage • Increased paper and electronic fraud • Technology fuels change—and addresses risks in the current environment

  5. Changing Technology Efficiency and Cost Containment • 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

  6. Look Back to Prepare for the RFP Conduct a “WWW” review of your current depository relationship, and prioritize: • What’s Working Service Functionality Relationship Value • What’s Not Identify product and service gaps Quantify concerns about value

  7. Look Ahead to Prepare for the RFP Continue the “WWW” process by considering: • What’s Next Economy/revenue Expansion New technology New investment options Regulatory changes

  8. Prioritize and Define • Must Have’s! Keeping what works 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!

  9. Help Your Banks Prepare Better Responses More information = better, more accurate pricing! • 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

  10. Tailor the RFP to Your District • Highlight “must have” services and features, such as: • 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 address your “wants”. These could include: • Moving away from paper payments • Adding deposit alternatives • Offering internet payment options

  11. Tailor the RFP to Your District • Give direction on what you are “exploring”. Are you 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

  12. About Merchant Services and Commercial Card • Merchant Services • 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 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

  13. Evaluating the Responses • Develop criteria such as: Expertise Safety and Soundness 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

  14. Keep Your Consultants You may receive several good bid responses, but you can only 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

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