Lynn C. Nieves

Creating a Great Banking RFP A Bank’s Perspective

Lynn C. Nieves, MBA, CTP Government Treasury Services Officer

November 21, 2008

2Government & Institutional Banking

Selecting a Banking Partner:

I. Identifying Your Objectives and Needs

II. Developing an RFP

III. Components of an RFP

IV. RFP Evaluation

Table of Contents

3

Selecting a Banking Partner:Identifying Your Objectives and Needs


Closely evaluate your needs

and objectives

Where to Begin: Start with what you have today, Evaluate your current situation (cost,

quality, performance) Outline your objectives, Set goals.

Helpful Tools: Current reports received from the bank, Your Account Flowchart / Schematic (if

available), Analysis statements.

Identifying Your Objectives and Needs

First Steps


Are you facing growth or volume issues?

Do you wish to move from a paper to electronic environment?

Are you spending excessive staff time on research and reconciliation?

Do you have limited reports and information?

Does it take too long to collect funds?

Are you vulnerable to fraud?

Plan for the future

Identifying Your Objectives and Needs

Understand Your Specific Situation

6

Selecting a Banking Partner:Developing an RFP


A good RFP addresses appropriate services that fit your objectives and needs and enables you to fairly evaluate potential banking partners and their capabilities.

Balance Reporting Account Reconciliation (checks / deposits) Lockbox Direct Deposit of Payroll / ACH Ability to Incorporate New Services Banking Services for Employees

Loans Complex Merchant Card Processing Complex Corporate Card/Purchasing Card Armored Car Service ATM Investment Portfolio Management Trust Dept Services

Developing an RFP - Focus on the Services Most Important to Your Banking Needs

When searching for a banking partner, it is

important to focus on the most

relevant issues

Services to

Include

Services Not to Include


Identify objectives and needs

Develop an RFP

Issue RFP

Evaluate responses

Select winner

You Responding Banks

Develop an understanding of your needs

Brainstorm solutions

Seek clarification and validate solutions for effectiveness and efficiency

Compose RFP response

The RFP process is

time consuming and may take 3 to 6 months, from start to finish

Developing an RFP – Roles & Responsibilities


What kinds of questions should we ask?

What kinds of questions should we avoid?

How detailed should we make the RFP?

Do we fully understand the solutions that we are seeking?

How much information are we prepared to read and evaluate?

Caution: Too many requirements may inadvertently eliminate respondents.No fees for banking supplies, Interest rate restrictions on index,Required spread above or below index rate, etc.

Consider a strategy to ask the

right questions

Developing an RFP - Knowing Where You are Going is Half the Battle


Identify minimum qualifications: Location in your area. Collateralization of your deposits.

Provide clear and concise instructions.

Develop an “easy” format.

Eliminate repetitive information.

Provide services requested and volume estimates.

Outline the account structure or include an account flowchart.

Identify measurable evaluation factors clearly.

Make an electronic copy of the RFP available.

Essential elements to ensure

the selection of an optimal banking partner

Developing an RFP – Key Aspects


TIM

ELIN

EMonth Two

Month Three

Month One

Develop RFP. RFP release date.

Pre-proposal conference (optional). Deadline for additional questions. Issue answers for written questions. RFP Due Date.

Selection of finalists (optional) Oral presentations (optional) /

Demos / Tours. Award business.

Establish a schedule of events

and timeline for the RFP

Developing an RFP - Set Clear Expectations


You may not be able to use another organization’s RFP to produce your own.Other RFPs may not address your specific

situation, needs or issues.Use other RFPs only as a guide.

The result should be an RFP that ensures you will select a solution that fully addresses your original objectives and needs.

A word of caution

Developing an RFP - Ensure Your RFP Addresses Your Needs

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Selecting a Banking Partner:Components of an RFP


Carefully consider each piece of the RFP

to increase your

ability to fairly evaluate and select

the optimal banking partner

Components of an RFP - Understand How the Pieces Fit Together

IV. Proposal Evaluation

Criteria

II. Proposal Instructions:

Technical Proposal& Pricing

III. Term of Award

I. Introductions & Scope of Services

V. AttachmentData


Begin with clear proposal instructions to provide consistency in responses. Sets the stage for the RFP. Provides program overview. Outlines goals and objectives.

What are you trying to accomplish with the RFP?

Establish minimum qualifications: Nearby branch location. Ability to collateralize deposits based on state law.

Provide bank account schematic.

Specify delivery instructions: To whom do we submit the bid? Where is the bid to be delivered? At what time is the bid due? Number of copies? (paper vs. electronic) Other special requirements?

Set due dates.

I. Introductions &Scope of Services

Components of an RFP – Step One


The technical proposal is an exhaustive list of questions and answers.

The format should be: Easy for banks to prepare and respond to. Simple for you to evaluate.

Group questions by major topic, if possible.

Q&A should identify all requirements in a single place: General expectations or requirements. Specific requirements “must-haves.”

RFP Attachments: Detailed Account Schematic. Volumes. Balances.

I. Introductions/ Scope of Services


Technical Proposal

Components of an RFP – Step Two – Technical


The pricing proposal should be developed based on analysis statements, services used/requested and volume of activity.

The proposal should require a specific format for: Required services. Optional services. Other recommended services.

Questions to consider: How will we address different pricing structures?

(monthly fee vs. usage fee, etc.) How will we account for extra costs? How can we ensure that we provide accurate data?

Other considerations: Use product descriptions and not proprietary product

names. Ask respondents to include all pricing elements that are

necessary to implement the solution.

Be sure that what you are asking for in the Technical & Pricing Proposals is consistent with the information you provided in the Introduction & Scope of Services section.


Pricing Proposal

Components of an RFP – Step Two – Pricing


What is a reasonable contract length? One year? Five years?

Consider the contract term in light of these factors: Time and cost to issue RFP. Time and cost to review proposals. Cost of moving the banking relationship. Human resource constraints.

Should the award be annually renewable?

III. Term of Award

Components of an RFP – Step Three


How do you plan to evaluate the proposals?

Identify what is most important: Innovative products and services? Experience of personnel? Customer service? Cost of services? Interest rate/earnings credit rate?

Publish evaluation factors in the RFP.

The key is to link evaluation factors to what is most important to you.

IV. Proposal Evaluation

Criteria

Components of an RFP – Step Four


Services used and associated volumes.

Average collected monthly balances for all accounts for the prior 12 months.

Daily or weekly amounts of coin/currency deposits.

Any specialized information related to your operation.V. AttachmentData

Components of an RFP – Step Five

THANK YOU!!!

Lynn C. Nieves, MBA, CTP Government Treasury Services Officer

Wachovia Bank, N.A. 100 S. Ashley Drive, Suite 1000

Tampa, FL 33602 Phone: 813.276.6688

[email protected]

Lynn C. Nieves

Economy & Finance

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