GUIDE CUSTOMER ON BANKING SERVICES

GUIDE CUSTOMER ON BANKING SERVICES and products

Liability products

Liability products represent funds that a bank owes to its customers. The deposits from these products are the bank’s primary source of capital, which it uses to fund its lending activities. 

1. Savings account: A standard account for personal banking that allows for deposits, withdrawals, and interest accumulation. Some savings accounts may have restrictions on the number of monthly withdrawals.
2. Current account: A transactional, non-interest-bearing account primarily for businesses and individuals with frequent transactions. It offers high liquidity and often includes an overdraft facility.
3. Fixed deposit: An investment where a customer deposits a lump sum for a fixed period at a higher, predetermined interest rate. The interest rate is generally higher for longer tenures.
4. Recurring deposit: A savings scheme where a fixed amount is deposited at regular intervals for a set period. At the end of the term, the customer receives the total amount plus accumulated interest. 

Asset products

Asset products represent loans and other credit facilities that generate interest income for the bank. These are liabilities for the customer, but assets for the bank. 

1. Mortgage loans: Financing provided for purchasing or developing property, secured by the property itself.
2. Personal loans: Unsecured loans that provide a lump sum of money for personal use, such as financing a major expense.
3. Vehicle loans: Secured loans specifically for purchasing a car, motorcycle, or other vehicle.
4. Asset finance: A specific type of loan for financing moveable assets for personal or business use, such as equipment, machinery, or vehicles.
5. Credit cards: A revolving line of credit that allows customers to make purchases up to a certain limit. The customer must repay the borrowed amount, often with interest. 

Trade finance products

Trade finance services assist businesses engaged in international trade by mitigating risk, managing cash flow, and providing financing. 

1. Letter of credit (LC): A bank’s promise to pay a seller on behalf of the buyer, guaranteeing payment as long as the seller provides evidence that they have shipped the goods as per the contract.
2. Bank guarantees: A bank’s promise to cover a debt or obligation if a customer fails to meet the terms of a contract. This can include bid bonds, performance bonds, and advance payment guarantees.
3. Invoice discounting: A short-term financing option where a business sells its unpaid invoices to a bank at a discount to receive immediate cash.
4. Working capital financing: Loans or credit facilities to cover a business’s day-to-day operational needs, such as purchasing raw materials or inventory.
5. Documentary collections: The bank facilitates the transfer of trade documents from the seller to the buyer. This is less secure than an LC, but often less expensive. 

Forex products

Foreign exchange (forex) products and services allow customers to transact in foreign currencies for international business, travel, and investment purposes. 

1. Forex spot contracts: The buying and selling of foreign currency for immediate delivery, typically within two business days. This is used for global payments and foreign travel.
2. Multi-currency accounts: Accounts that allow a customer to hold balances in several different currencies, which is useful for international transactions and reducing currency conversion fees.
3. Forex forward contracts: Contracts that lock in an exchange rate for a future date, protecting a business from currency fluctuations. The exchange rate is agreed upon today, but the transaction occurs later.
4. International money transfers: Services like SWIFT transfers, Western Union, and MoneyGram that allow customers to send and receive money from overseas.
5. Forex cards: Prepaid cards that can be loaded with foreign currency, providing a secure and convenient way to make payments while traveling internationally. 

https://learn-with-your-best-tutor.blogspot.com/2025/12/manage-customer-communication-in.html

Types of Bank Customers

Micro customers

• Definition: These are individuals and micro-enterprises with low-income, often unbanked or underbanked, who require small loans (microfinance) and basic banking services.

Needs of micro customers

1. They require Accessible low-cost services,
2. Financial literacy support,
3. flexible repayment options.
4. They are often served by specialized microfinance banks or specific departments within larger commercial banks that offer tailored, simple products. 

Small and Medium Enterprises (SMEs)

• These are Businesses that fall between micro-enterprises and large corporations in terms of size, revenue, and number of employees.
• They Need a mix of retail and corporate banking products, such as business loans, credit facilities, and cash management services.
• Banks often create dedicated SME customer teams or separate business units to provide focused, tailored services, rather than managing them with corporate clients. 

Corporates

• These are Large, established companies with significant assets, high revenue, and complex financial needs.
• They need Sophisticated financial solutions, including investment banking, trade finance, corporate loans, and treasury management.
•  Banks offer specialized corporate banking divisions with relationship managers to build strategic, long-term partnerships. 

Parastatals

These are State-owned enterprises or government agencies that provide public services.

• The need Specialized financial products for public sector entities, often involving complex regulations and procurement processes.
• Service approach: Banks typically serve them through institutional or corporate banking divisions, adhering to public finance laws and government protocols. 

Non-Governmental Organizations (NGOs)

Non-profit organizations that operate independently of governments to address social or political issues.

• Needs: Specific banking solutions for managing donor funds, handling foreign currency, and ensuring financial transparency.
• Service approach: Banks provide specialized accounts and services, including treasury and forex management, to meet the unique requirements of the non-profit sector. 

Organizational structures in banking

The structure of a bank dictates how it serves different customer segments.

• Divisional structure: Large banks often organize themselves into divisions, such as Retail Banking (for individuals), Commercial Banking (for SMEs and mid-sized businesses), and Corporate/Investment Banking (for large firms and institutions).
• Functional structure: A common model where the bank is organized by function, such as lending, deposits, risk management, and human resources. Specialized customer-focused teams can then be created within this framework.
• Team-based structure: For specific customer segments like SMEs, a bank might use a team-based model. In this structure, a dedicated team serves a specific group of customers, ensuring more personalized and consistent service. 

Also see https://yourbesttutorhub.com/customer-service-course-outline/