Negotiating with a Financial Institution – Are You a Good Negotiator?

Negotiating with a Financial Institution? We all love haggling. But haggle too much with the financial institutions or non-banking financial institutions and things can go wrong very quickly. From a potential client, you could very quickly be labeled as a nuisance. Don’t be that. Learn what to expect when you go in for negotiation.


Hello my name is Faisal Khan I’m a banking and payment consultant and we’re not going to be answering a question today per say on money transmission but a question that I would like to address and I have to ask and answer myself, if you will, is when a lot of people contact me and they want introduction to banks or they want introduction to license holders etc. and then they try to play this negotiation game like they’re really really good at it.

The fact of the matter is you’re not a good negotiator. I’d (say) to 90 percent of, not ninety, let’s say, three-fourths of my time I’m on the telephone. I do a lot of calls and I’ve seen a lot of negotiations happen. And rarely do I come across – rarely do I come across – people who are very very good at negotiation. And the thing is you see you’re talking to a bank. And you’re coming from a very very weak position. You are most likely a startup, you have some funding you think you have the best product in the world, you think is the key element here. And you want, you know, you obviously want something from the bank and the bank gives your price and then you start negotiating. You may have encountered maybe 10 20 30 40 50 banks at most in your short career and negotiating like the way you are doing with the bank. Or with the licence holder. The bank does probably that number in a week. They have, they have a huge advantage with you.

So trying to negotiate, trying to come from a weak spot and trying to win over a transaction or a term sheet, you will rarely succeed at that. The bank will see it as a waste of time. If you haggle too much it will say bye bye and move on. You will be shut out; you will be shut out of the system and you will be shut out of the network. Other banks will also get to hear about it as such and such person is just wasting time the haggling. Banks would love to work with you if they can make a profit, they’re in it for the profit game. If you haggle too much so that you want to drive the profit down, you’re obviously have come from a client a potential client to an absolute nuisance value for them. And what do you do with nuisance? You get rid of it.

So, when you’re trying to negotiate understand that there’s only so much negotiation that can be done. You are not a good negotiator. Let me, let me, no matter how much you and I disagree that fact is confirmed. You do not have an edge on the negotiation table with respect to the licence holders, with respect to the banks. You are… if you did, you wouldn’t be talking to them in the first place would you. So the fact of the matter is that if you’re going to be trying to if you’re going to try to negotiate, a small margin is acceptable for everyone and that’s about it. Anything more than that and you will definitely risk getting yourself ejected from the conversation.

Just a little thing I wanted to share with you. If you have any comments on this thing feel free to share. Until next time, have a good one.

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This page was last updated on September 1, 2022.

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