CICP Road Diary: Entry #4 Two Sides to Every Story

This could just be me, and my uninitiated self, but in my experience with credit, credit managers, financial management professionals, financial management, and what have you, it always seemed like these things, and these people, were separate from banking, or bankers.

The word “silo” comes to mind.

This was a word that, before I began working here at NACM, I associated only with farming. All of the sudden I heard it used to describe the divisions of responsibility in a corporate entity, or the separation of who does what within a department or a sales organization or anything similar. 

The term itself connotes a sense of isolation, or almost loneliness, and while I didn’t realize it at first, was more often than not being used negatively. The idea that credit professionals should stay focused on their credit “silo,” wasn’t sustainable anymore, and probably hadn’t been for quite a while. Understanding the needs of sales, marketing, treasury, and everyone else was, and still is, a necessity.

To tie this back to the CICP course, and to that opening paragraph up there, I always looked at business and banks as two separate silos. Larger ones than those of credit, or sales, or marketing, or collections, or any others you care to name, but still their own unique, unattached worlds. The CICP course has changed that for me.

It could be different in domestic credit, but in international transactions, banks and their corporate customers seem to be very closely twined together. The course tips its hat to this fact by giving students a rundown of the process of international credit and risk management at a seller, as well as the process of international credit and risk management at a bank. You’re getting both sides here, rather than just the knowledge that you’d need to equip you to manage risk on only one of the two sides; banking or business.

It took me a couple modules to really catch it, but I think much of the course involves recognizing that credit management at a bank is different than credit management at a seller, then keeping your eyes peeled for the more subtle, important ways where these two things overlap. While I have no professional experience with this, I’d bet money that being aware of these items, the similarities and the differences, would help a banker better understand their corporate customer and a corporate customer better understand their banker. And that sounds pretty win-win for everyone there.

In any case, I was not expecting that from the course, at the onset, although maybe I should have. A one-sided look at the international risk management function probably wouldn’t yield results nearly as interesting as the ones I’ve found here.

Till next time,

~Jake

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