It is known as a bank correspondent to those companies that act in an authorized manner on behalf of a bank and carry out various banking operations for it, usually simple or low-cost for the bank.
Over the years, commercial banks have seen in the use of banking correspondents a good way to extend their work areas and access to a greater number of clients, who seek to facilitate their relationship with the entity and the company. improvement of its services.
Although normally a bank correspondent has the ability to act more or less autonomously, the final responsibility for his activity always and at all times passes through the banking entity for which he works. In this way, a large number of businesses enjoy the status of correspondent and carry out activities for the bank.
Along with the development of digital or online banking, the appearance of this concept of banking responds to the need of commercial banks to be able to reach and provide their service to a greater number of geographical areas, even those with difficult access or small population centers. where it would not be profitable to open a current branch.
Another existing modality in the banking market is that of the individual banking correspondent, that is, a person chosen and formed by the bank itself who works autonomously, but supervised by it at all times who performs these tasks independently on behalf of the bank..
Activities to be carried out by the bank correspondent
The activities to be carried out by the banking correspondent are mainly:
- Collection of bills for energy supply services, telephony, subscriptions to television or Internet services, among others.
- Collection of loan fees, personal credits and other banking products,
- Electronic teller service for the withdrawal and / or deposit of cash.
- Bank transfers and check cashing.
- Other daily banking services, such as the maintenance of bank cards or inquiries of the products offered by the entity to which they adhere.
Advantages offered by the banking correspondent system
Mainly, the most positive aspect of the use of correspondents is the extension of the commercial network of the banking entities and the easier access for the population, since they do not necessarily have to attend a branch to manage all their activity.
From the point of view of correspondents, developing these new activities in their businesses allows them to expand their line of work and achieve new levels of profit, as well as attracting new clients.
Examples of correspondent bank
A clear example is the agreement between a bank and a supermarket chain to offer customers the possibility of withdrawing cash from their accounts in the same supermarkets taking advantage of the payment for their purchases. In other words, it is possible to pay for a purchase of 10 euros with a card by paying 50 and obtain the difference in cash at the till.