DURING the course of the week, it was interesting to note yet another interesting post on social media relating to banking.
“Which Bank would you advise someone to open an account with and which Bank would you advise them to avoid,” the post read.
These are very important questions to ask as you go about looking for the best ways to secure your hard-earned financial resources. However, more interestingly were some of the comments that followed this post.
“From my experience, what should determine the choice of your bank is the amount of income that you earn. Some banks are not for certain categories of workers, some banks are for big businessmen and women who earn a lot. Open an account that supports the degree of your income. Some banks may turn your entire monthly earning into book balance,” the paraphrased comment read.
There were other comments relating to some banks having higher charges on certain accounts in comparison to other banks.
Allow me to begin by indicating that banking plays an important role in the financial life of a business through financial intermediation. Banks facilitate the process of production, exchange, and distribution of wealth across the various sectors of the economy, and this entails that banks are critical partners in the process of economic development and growth.
Banks are the custodians and distributors of liquid capital, which is the lifeline of both commercial and industrial activities.
Having said so, we must be haste to point out that Commercial Banks may offer both retail and corporate banking services.
In order to address the topic at hand today, we will restrict ourselves to retail banking services.
Retail Banking: Also known as consumer banking, can be defined as banking services that provide individual customers ways in which to manage their money, have access to credit and deposit their money in a safe and secure manner. As such, retail banking services include cheque, savings and investment accounts, mortgages, personal loans, credit and debit cards, digital and mobile banking services, amongst others.
It is important for both prospective and existing bank customers to fully understand and appreciate that the relationship between the banks and their customers has is two-way and assigns rights and responsibilities to both the banks and the customers.
Bank Customer Entitlements
As an existing or potential customer, you can expect the following reasonable conduct from your bank:
1. Act fairly and, reasonably and ethically towards you.
2. Provide you with effective and adequate disclosure of information, including the Terms and Conditions of products and services on offer.
3. Provide you with information in a plain and understandable language format.
4. Ensure that the bank staff attend to your transactions and enquiries promptly.
5. Provide you with reasonable notice before the implementation of changes in the Terms and Conditions, fees, charges, the discontinuation of products and/ or services and the relocation of premises.
6. Acknowledge a formal complaint within reasonable time, and work to resolve the complaint within five business days form the date of receipt.
7. Provide affordable and accessible basic banking services to all Zambians.
It is however important to shop around for the product or service that suits your needs. Ask bank officials for information about the different accounts and select an account that best suits your needs.
This entails that it is important to understand your financial goals-what do you want to do with your money?
1. Is your target to save the money? If so, you may wish to establish what savings products and services the bank has to offer. Find out how their Savings Accounts work, and what the charges are. Also, know how long you will want to set aside that amount of money in form of saving.
2. Is your target to safely keep your money for your day-to-day transactions? If so, you may wish to enquire about a Transactional Account/ Current Account that will provide you with a debit and/or credit card, online and mobile banking services and will allow you to carry out your transactions with ease and at your convenience.
3. Would You like to set aside some money over a period of time, and you wish to gain some interest on your deposits? Perhaps you may wish to consider opening a Fixed Deposit Account or place your money in an Investment Account.
However, owing to a gap in information, a lot of bank customers have opened accounts that may not exactly suit or match their financial needs. For example, a lot of customers will walk into a bank branch and request to open a savings account. This of course is a good initiative if your goal is to save money. However, some customers have been known to also use their savings accounts as transactional accounts-they use these accounts for purchase of goods and services using their debit or credit cards, pay utility bills, transfer money from their account to other accounts and much more. However, Savings Accounts were not primarily designed for these kinds of activities and depending on the Terms and Conditions of these accounts, high volumes of transactions may attract certain fees or charges, that may not necessarily apply if such a customer opened a separate Current Account for their everyday transactional needs. This is where information is critical-know what your goals are, and which banking products or services will best suit your needs.
It is important to note that the successful symbiotic relationship between banks and their customers thrives on both parties carrying out their duties and responsibilities to each other, for ultimate satisfaction of the customers.
So, in addressing the topic from the social media post, it is not entirely true that certain banks are not for certain categories of workers, but rather, the key lies in understanding what you want your money to do for you-get as much information as possible from your bank and choose the right product to suit your needs.
Be sure to join us again next week as we discuss another interesting topic.
As always, your feedback is highly valuable, and this platform offers an opportunity for further engagement with members of the public on matters relating to Commercial Banking. Please share your feedback with us via E-mail: Mirriam.Zimba@baz.co.zm
