How to find the best bank for your bucks

August 10, 2013

Sifting through the many banking options can make it difficult to find a financial institution that understands the needs of a medical practice.

Whether you need credit for new equipment or want to simplify daily financial tasks, it is important to find a bank that understands the needs of your practice. Below are some of the most important things to consider when choosing a bank.

Security
For physicians, keeping payer financial information safe is a top priority. Because many physicians still receive paper checks, using a lockbox, which transfer practice mail directly to a bank via a P.O. Box, can make handling checks more secure.

“Using lock box services eliminates a very real opportunity for internal theft as the bank immediately deposit the funds as well as scan explanation of benefits and other documents so that they can be reviewed by administrative or billing staff,” says Joe Capko, partner at Capko & Company, a medical practice management consulting firm.

Bank fees
Relationships with your bankers are the most important factor for keeping any bank fees low, says W. Henry Walker, president of Farmers & Merchants (F&M) Bank of Long Beach, California.

“This is based on the fact that a long-term relationship may turn out to be more cost effective. With sufficient funds on deposit, physicians can earn credit through account analysis that would offset the cost of the banking services utilized by their practice,” he says.

Credit and interest rates
Physicians have unique credit needs for rent and ownership of facilities and capital equipment. Shopping for rates is a luxury many physicians don’t have. Walker says that finding the best rates doesn’t always mean the best deal.

“Many community banks may find it difficult to be rate competitive, but can offer better service over the term of the loan. For example, many F&M customers find that the relationship they have with their banker turns out to be more cost effective than 25 to 50 basis points,” Walker says.

Mobile and Web services
A growing number of financial institutions are offering mobile and Web banking options, but Capko says it is important for physicians to have final approval on all transactions.

“For the most part, online apps are geared toward individuals. The day-to-day operations of a medical practice require the systematic processing of many payments, which doesn’t lend itself to well to a mobile phone,” he says.

Credit unions versus commercial banks
Credit unions tend to offer more personalized service and favorable interest rates. However, finding networked automatic teller machines (ATMs) can be difficult-about 3,000 of the nation’s 7,000 credit unions share ATMs.

Commerical banks usually come with other perks, including more ATMs, mobile apps, and 24-hour customer service. But as a customer, you might feel like there is less one-on-one attention.

“A banker who has experience with physicians can offer targeted advice and products custom-built for their practice. This can provide both a competitive advantage as well as an additional layer of financial security,” Walker says. “Patients entrust physicians every day to be an expert in their field. The same should be true of your banking relationship.”