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Bank clients should understand that a bank is not just a source of loans or merely a safe repository of your savings but is able to provide other services beneficial to the client.

Sanderson Abel Correspondent
Banks aim to facilitate the effective use of funds ranging from individuals, farmers or the diverse small to medium enterprises

The financial system is expected to act as an intermediary for all resources in the economy. The sources of funds are provided by savings in both the private and public sectors as well as by the net inflow of funds from abroad.

They are collectively channelled through intermediaries such as banks.

This intermediation function involves mobilising resources by providing the means for savers to hold monetary and financial assets and at the same time allocating these resources for productive investment.

Banks play a substantial role in mobilising savings to promote investments and growth.

This function of banks is significant in an economy where in banks are dominant players in the financial markets.

These roles can be summarised as follows;

Financial intermediation – Mobilising and pooling financial resources from savers to borrowers.

Facilitating trade – By managing and executing payments for transactions through national and international payment systems and platforms including mobile-based systems;

Advising individuals and businesses on various issues pertaining to the products offered

Ensuring the optimal and efficient of scarce financial resources.

Mobilisation of resources both internally and externally for lending to those sectors in need of these resources;

Pooling, spreading and transferring of certain risk

How do you derive the benefits from the relationship with your bank?

One of the most important observations is that most bank customers do not derive the maximum benefit from their banks because they concentrate on the traditional banking products.

The traditional bank and customer relationship is perhaps one of the most treasured relationships by the bank.

Banks take relationships with their clients so seriously to the extent that they will invest resources to create the relationship and to maintain it.

However, unfortunately sometimes it appears that after the relationship has been established, it may not be nurtured sufficiently for both parties to extract maximum benefits from the relationship.

There are a number of ways of a bank customer can enjoy enhanced benefits from his or her bank.

Think beyond deposits and loans

Bank clients should understand that a bank is not just a source of loans or merely a safe repository of your savings but is able to provide other services beneficial to the client. The majority of bank clients open bank accounts merely to receive payments from their employers or clients.

These transactional accounts are useful in that money is kept safe in the bank and one can withdraw it later at their convenience either by going to the bank or using other channels provided for accessing cash.

As a customer you should ask for a little bit more from the relationship with your bank. There are several ways in which you can extract the maximum value from your relationship with your bank, beyond just getting deposit or savings products and credit facilities.

Exploit information from your banker

Bankers are also a good source of information on how you can manage personal savings, insurance and other financial safety nets that you and your MSME business need to have financial peace of mind.

While banks are in business to make money, they are also very good at advising their clients how they can save money and cut the cost of doing business.

Not surprisingly, your banker is the best placed person to advise you how to cut the costs of using bank services.

A bank is supposed to be involved with its client in all of the movements of his money and will provide guidance on how you as a client can get the best financial advantage so can you get the most return on your funds.

Banks help their customers with their business’ health analysing cash flows, balance sheets, assets, receivables and payables.

Be open with your banker

Communication is of utmost importance in the bank-client relationship.

The bank through its customer service channels and the client have a lot to gain from a sound communication platform.

The first step therefore is to improve the level of communication between you and your bank. Banking is about trust.

Your bank must trust you and you must trust your bank.

The relationship between a bank and its client begins when one walks into a bank typically to open a bank account. Throughout the banking relationship, from the account opening process, information will flow to the bank from the client and vice versa.

Banks are careful that client information and communications from the bank to the client remain strictly confidential and privy only to the client concerned.

This is where rule number one in relationship building between a bank and its customers is based on a popular folk statement.

Never be ashamed to ask

questions

When entering into a relationship with your bank, ask, ask and ask again about any issue that may be unclear to you. This also helps you provide accurate information to your bank. Asking questions is a good habit.

Don’t pretend to understand a product, when you’re not clear. Ask your banker to clearly state what your obligations under the product or service are as a client.

Also ask how you will benefit from the product or service and, most importantly, be very clear what it will cost you to access the service or product. This will limit misunderstandings between you and your bank in future.

Treat your banker like any other valuable client or strategic vendor. The best banking relationships are based on pro-active communication. By establishing a pattern of regular communication – and not just when you need something – you build a relationship. It tells the banker that you’re more than just a fair-weather client.

You’ll save time preparing for your annual loan review because you won’t have to re-educate your banker on your business.

Sanderson Abel is an Economist. He writes in his capacity as senior economist for the Bankers’ Association of Zimbabwe. He can be contacted on [email protected] <mailto:[email protected]> or on 04-744686, 0772463008.