Agribusiness Banking Needs

Agribusiness combines all facets of business operations and associated organisations that make up the agricultural sector. Being a significant export money earner, pretty much every link in the agribusiness chain needs a reliable bank behind it.

The specialized nature of farming enterprises requires a banking approach that differs from standard retail. So – what do agricultural producers require from a banking relationship? Each year CANSTAR researches in great detail the financial institutions offering outstanding value to this sector. It goes without saying that standard business finance and deposit products are essential. Beyond the standard practice though, CANSTAR consider the following institutional factors to be an important part of a successful agribanking approach.

Availability of Relationship Managers

Despite the increasing prevalence of online transacting and banking self-service, the specialised nature of agribusiness means that the human factor is still an important feature in a good business relationship. Whether face-to-face or on the telephone, an availability of well-trained, knowledgeable and productive relationship managers is paramount to the ongoing success of an agribusiness division within a financial institution.

Additional Products and Services within Agribusiness

Beyond standard loan and deposit products, agribusinesses can require access to other more specialised products, including:

  • Risk management products. As an export-focused industry that is subject to both currency and commodity price fluctuations, agribusinesses can require access to risk management products that help to even out cashflow.
  • Seasonal finance. Aside from the risk of drought or flood, many agribusinesses are exposed to seasonal fluctuations in cashflow, with expenses often being incurred long before income is realised. Access to seasonal finance products can be essential to keep the business running throughout the year.
  • Equipment finance. The equipment required to keep an agribusiness operational can range well into six figures per item. Specialised finance is a must!
  • International services. Dealing with foreign countries provides its own set of issues and account needs. Foreign currency accounts, a smooth international bank transfer process and trade finance facilities are important.

Other Specialist Services

In addition to products, agribusiness can benefit from access to other specialist financial services, including forms of insurance such as Key man cover, Farm Building cover, Business Life and Business Liability cover as well as financial planning advice.

Financial institutions can also play a key business coaching role; providing support, knowledge and guidance on all agribusiness financial needs.

Online Banking Functionality

Personalised service is crucial – but agribusiness also requires excellent online banking functionality. That includes mobile applications, multiple payment functionality and automated graphing and reporting.

Information and Education Services

Farming is an intensive business with little time for research. Financial institutions can add a great deal of value to their agribusiness clients by the provision of online economic and industry insights, analysis and education tools. It is in the interests of financial institutions for their customers to succeed financially and they can potentially play an important mentorship role, providing property owners with access to market knowledge and insights to help identify business growth opportunities.

 

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