Dr Bob Murray, an expert on psychology and neuroscience, recently posed a question in a seminar I attended: 'What is a human?' I can tell you, he wasn't talking about blood, bone and sinew.

From a behavioural neurogenetic perspective, every single one of us (with the exception of the occasional psychopath):

  • fears exclusion;
  • isn't rational;
  • makes poor decisions under stress;
  • focuses on relationships (80% of the time); and
  • spends 70% of dialogue on gossip.

How does this manifest itself in the business world?

In your job? In your relationships with your borrowers?

From his extensive studies, Dr Murray has determined that less than one per cent of communication between humans is actually about the presenting issue. About 20% is about underlying issues: people's assumptions, their hopes and fears. So, what's left?

The rest – 79% of it – is about the relationship between those communicating with each other. Our brains spend most of their time dealing with deep-seated, genetically-engrained issues. Do I trust you? Are we from the same 'tribe'? Can you satisfy my needs?

What does this mean for relationship bankers? A lot of what your borrowers are saying may have only a passing resemblance to what they're actually thinking. Most of it remains unspoken and rests instead on the strength of your personal relationship with them.

So, here are some things that your borrowers are probably thinking, but perhaps haven't raised with you...yet.

INTERNAL RESTRUCTURES

Given the almost primordial importance of relationships, when a bank undertakes its (seemingly) annual ritual of internal restructuring, it risks disturbing the key element of the lender/borrower relationship: the personal connection between people. Do everything you can to retain a single point of contact for borrowers. They'll thank you over the long term.

THE NEED FOR SPEED

Our borrower clients (at least the treasurers, CFOs and general counsel we work for) are increasingly time-pressured. This can impair critical thinking. When credit applications take weeks to process, with credit committees reverting with evermore detailed queries, stress levels can escalate rapidly. Overlay this with onerous KYC requirements (or a slavish attachment to what is 'market' for similar deals) and your borrowers start relying on gut instinct rather than rational thought. That's when surprises occur. The bank that automates or streamlines these processes - reducing time between application and execution - will win.

WILL YOU STILL LOVE ME TOMORROW?

We all fear exclusion as humans. While our borrower clients may beat up on domestic banks to match the margin of the foreign banks currently active in the Australian market, they know not to push too far for fear that the table will be turned when they, their industry sector, or the debt markets, heads south. They also fear that you won't give them much advance warning that they are no longer the darlings of the market. They value the fact that their relationship banks will be with them for the long haul rather than exiting bank groups or reducing their hold levels without a lot of prior warning (or explanation).

VALUE FOR MONEY

Back to the point on relationships. Borrowers are seriously questioning whether financial advisers or mandated lead arrangers can actually control bank groups. If the lender/borrower relationship is fraught enough, the borrower/arranger/syndicate relationship brings a whole lot of crazy to the table. Borrowers are prepared to pay for a financial service if there is value in it for their business. But they're under increasing cost pressure and unfortunately they will only know whether the outlay has been worth it once it's too late to change course. For some, if a syndicate goes rogue, their jobs could be on the line.

How do you think that feeds into one's subconscious?

THE UNKNOWN UNKNOWNS

Humans are non-rational. It's too soon after the US election result, and the UK High Court challenge to Brexit, to know what major geopolitical shifts will do to margin spreads. However, the uncertainty is feeding into borrowers' business planning and board strategy sessions. For Australian borrowers, a significant knock-on effect is the one that could hit China – a Chinese slowdown because of trade protectionism is a much bigger concern for our borrowers.

Banks will always try to find ways to compete in financial services based on pricing, technology and innovative products. But the next time you catch up with one of your borrowers, and conversation turns to sport, politics or the school run, just keep in mind that your borrower's brain is actually scanning constantly for subconscious signs and signals about whether you are to be trusted. Some of the most important things underpinning your relationship may never be spoken aloud.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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