ABSTRACT

The purpose of this study is to establish the effect of agency banking strategy on customer service in commercial banks. The study had four objectives to achieve: To establish how personalized agency services affect customer service; to find out how reduced waiting time affects customer service, to find out how reduced service costs affects customer service and to establish the strategies that can be used by banks to enhance customer service. The bulk of the research relied on secondary data. It was established that agents perform several functions or activities on behalf of banks. The functions include accepting cash deposits, effecting cash withdrawals, opening accounts for new customers and to some little extent issuing interim bank statements. There are some services that are however not common with the agents such as foreign currency transactions, issuing cheque books to customers and processing of loan applications.

The study also established that there is a strong link between the use of agency banking and customer service improvement. It was also confirmed that the agents have greatly improved the level of customer service in commercial banks. The study recommended that banks should look for ways of motivating the agents such as through the use of performance based bonuses. This will motivate them to work better thus improving customer service. It was recommended that this study can be replicated later to establish whether there are any changes in agency banking and customer service in banking.

Key words; Agency banking, strategy

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