Managers in Many Financial Institutions Handle Large

Managers in many financial institutions handle large sums of money. However, a small percentage of this cash is involved in the day-to-day running of the businesses' engagements. Since money is the commodity that facilitates exchange of goods and services, it is necessary for those people handling to be good custodians. Most business organizations prefer to keep their money in banking institutions. This not only safeguards the money from risks such as theft and loss but also ensures that finance managers remain transparent and accountable. Banking services require that customers meet some financial responsibilities. In this paper, focus is on the service model and bank holding balance model as offered by different banks. It explains the reasons as to why the latter model is most preferable than the former model (Kennedy, 2005).

As a finance manager, I find the bank holding balance model to be the more appropriate to meet the needs of my business as compared to the service model. Unlike the latter, holding balance model allows banks to charge a fixed amount of money on the total balance that a business holds in the identified bank. These charges are periodical in nature and can easily be ascertained by the firm that utilizes the banking service. On the other hand, service model allows the bank to charge the business for every service they render. Since banking process is dynamic and continuous, firms employing the latter model will have to meet the expenses depending on the number of services received from the bank. In addition, it is difficult to ascertain the circumstances and the number of times a firm would require the services of the bank. This could result to unnecessary overhead costs which could, otherwise, been avoided with the alternative model (Dlabay et al., 2008).

Several other factors need to be considered before a business settles on the services of a given banking institution. For example, it is important to verify whether a bank offers deposit insurance. This is an insurance cover that protects the deposits of the business organization in the event the bank fails. The insurance organization comes in handy indemnify the business thus protecting it from concomitant failure. Another factor that needs to be considered is the range of financial products offered. These include credit card, mortgage loan, and car loan. For a business intending to utilize any of these products, it is crucial to ascertain whether the selected bank offers the desired product (Kennedy, 2005).

In addition to the factors stated above, it is imperative for business organization to consider the customer service offered by the bank as well as availability of the bank. It is a common phenomenon to hear some customers complaining about insensitivity of some customer cares. Banking institution with good customer service ensures that the customer can access the required information at any moment of time. This service could be face-to-face, through a telephone conversation, or via electronic media such as email (Kennedy, 2005).