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A History Lesson to Master the Bank Lock Box

For a variety of businesses and organizations, a lock box (or “lockbox”) solution is key to efficient and profitable payment processing for corporations, healthcare providers, and non-profits.

Chris Nichols, Chief Strategy Officer at CenterState Bank, posted a great piece on LinkedIn about leveraging Lock Box services, along with a concise history. You’ll want to read the entire article, but here’s a particularly useful graphic included in the piece:

Graphic: Chris Nichols/CenterState

Graphic: Chris Nichols/CenterState

If your organization is offering lock box services, then these 10 ideas are great for maximizing your business. If you are a client of lock box, then these are the key elements you should be looking at from your vendor.

  1. Having expertise – The critical factor when it comes to selling lock box is understanding both treasury management and lockbox. Having in-house expertise allows the vendor to better understand the customer, their needs, and the solutions.
  2. Positioning service – When competing against lockbox services, and often large banks with expertise only available via phone, it is important for the community bank to educate the customer between the differences of a lockbox processor and lockbox expertise. This point often gets lost. While every competitor can process, having on-call expertise will make the difference.
  3. Easy and accurate technology – A great lockbox offering not only has memorable service but has a strong technology backbone that is easy to use, posts quickly and is accurate. Make sure your bank has the basics right and then expand.
  4. Having the ability to handle different payment streams – Banks should develop a solution that integrates multiple payment types into a consolidated payment stream. End customers should be able to mail checks, bring in checks to the branch or deliver ACH or credit card transactions all to one place and with ease.
  5. Provide customer self-help tools – Giving customers the ability to research items and archive for at least seven years has proven essential to winning larger accounts. 
  6. Provide lockbox image capture – Full imaging capabilities (different than remote deposit capture) should be available so the customer can not only handle items in their office (such as an HOA) but mail or bring checks into the branch. A superior lock box program will not only handle this but provide the required analytics and reporting for the customer.
  7. Local mail boxes – Some customers, particularly municipalities, still require mail drops within their county. Having the ability to have multiple mail boxes in different zip codes can be important if your bank covers customers across different counties or even different states. While this is getting less important, this capability has been crucial to winning some profitable customers.
  8. Customer training – End customer employees consistently turn over so having a quality training program to train the customer in the finer points of treasury management and provide ongoing training is a key distinguishing factor. In this day and age, leveraging videos, webinars, remote screen shares and online/mobile chat is becoming the standard.
  9. Create multiple deposit options – Interest bearing checking, NOW account sweeps, repo and/or reciprocal sweep to FDIC insured funds are important particularly for larger, more sophisticated accounts that are either counterparty risk or interest earning sensitive.
  10. Pricing position and bundles – Having well-thought out and designed solution bundles will make it easier for accounts to understand treasury management pricing structures and provide more certainty in pricing. Banks should be clear with the client on when, and how, fees get to be waived. Waiving fees certainly makes sense for some accounts, but not for others. Banks should consider putting product packages together allowing a set number of specially handled items but be more disciplined on who gets their fees waived. Further, these packages should be based on segment type and then by volume in order to demonstrate expertise in specific industries.

For healthcare providers, check out our blog entry from 2012: 10 Considerations for Selecting a Medical Lockbox Providerand our white paper entitled Medical Lockbox Innovations in Revenue Cycle Management Drive Profitability for Healthcare Providers.

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