Commercial banks serve a number of purposes within an economy. Customers can rely upon it for various services that they require in addition to the main functions of a bank. This is where the agency functions of commercial banks come into play.
This may include the collection of interest, dividends and cheques. The banker accepts instructions from customers.
Further functions may include debiting of customer accounts for rent or insurance premiums. The bank will then charge a fee for these services.
- Conducting Stock Exchange Transactions- If you are a customer with an interest in treading forex, then your bank can help facilitate the process. You can rely on financial expertise provided by brokers from the bank who will advise you on the best ways to trade which will maximise your funds.
- Acting as Executor or Trustee – If one of your family members passes away without a will, their estate can be handled by the bank. As Executor, the bank will ensure that creditors are paid and that assets are protected.
- Preservation of Wills of customers– Drawing up a will can be a great way of avoiding unnecessary drama and stress when an estate of a loved one who as passed on distributes assets to those mentioned as beneficiaries. Banks offer this service, often for a small fee.
- Electronic Transfer– The digital transformation of the banking sector would be far behind without the existence of the electronic transfer option. This solution has made banking much more convenient and efficient and is arguably one of the most popular agency functions of commercial banks.
- Collection of funds on behalf of customers in case of foreign transactions – This service is useful for customers who deal with exports and imports as well as professionals who are paid in foreign currency occasionally.
- Issuing of credit cards- based on the creditworthiness of the customer– This is a service that can be highly useful for the bank’s customers who need access to extra cash. Bank customers can rely on their bank rather than having to apply with other financial institutions.