Corporate Agent – Corporate agent alias corporate agent is a bank that provides services in the form of an agent role to companies and/or government agencies. Meanwhile, this service can be in the form of paying dividends or interest, clearing, redemption and registration of shares, to tax collection. The bank will charge a fee for the services that have been provided. For more details, this article will discuss further about corporate agents.
Definition of Corporate Agent
A type of corporate trust that acts on behalf of some form of government or corporate entity is a corporate agency. These agents provide a wide range of banking services to their corporate clients, from clearing checks, paying interest and dividends, to purchasing and redemption of shares. In addition, they can also collect taxes on behalf of the government agency, Sinaumed’s.
Government agencies or companies that use the services of this bank will later pay a fee. Usually, the bank has set its own price for being a corporate agent.
When taken from the word, corporate agent consists of two words: agent and corporative. The meaning of both is continuous, here is the full explanation:
According to economic terms, an agent is a business entity or someone who is trusted to represent or can act on behalf of another body or someone who has a good relationship with the person being represented. In some activities, the bank can also act as a corporate agent, such as a trustee or custodian.
On the other hand, KBBI states that corporate is cooperative. Thus, a corporate agent is a bank that acts or is appointed on its behalf to provide services, serve and assist or manage government finances.
Moreover, a corporate agency can be said to be a type of trust company. They act on behalf of government agencies or some companies.
A trust company is itself a legal entity that acts as an agent, fiduciary, or trustee on behalf of another body or person. Usually, corporations use corporatist agents to facilitate things. For example, asset management, guardianship and plantation, banking needs as a whole, to the transfer of shares.
It is possible for companies to outsource certain tasks by having a corporate agent. So, they are free to utilize internal resources related to the core business efficiently.
Meanwhile, corporate agents are also in the form of most of the banks that have a special function of the company to manage and run. There is no free will for a corporate agent to make all the decisions alone.
Corporate Agent Services
As before, corporate agents have service functions, including:
- clearing
- Payment of dividends or interest
- Stock redemption and registration
- Collection of taxes on behalf of the government
Advantages of Using Corporate Agent Services
There are far more advantages in corporate agents than just commercial banks. This is because corporate agents are also banks that are integrated with the government.
One of the advantages of using this service is that banks have more stable interest rates on loans. Often times, other banks provide interest according to fluctuations in the business cycle.
The Role of Corporate Agents
There is an important role for corporate agents in companies or governments, especially in the efficient management of resources. With this agency, governments or companies can spend time managing business rather than administrative tasks.
Not only that, company or government costs can also be more economical with corporate agents because they use professional human resources from banks to handle certain administrative tasks. The government or companies also do not need to pay more salaries for it.
Responsibilities of Corporate Agents
Implicitly, it has been explained that a corporate agent is a trusted company which is a legal entity that acts as an agent, trustee, or fiduciary on behalf of another body or person. These services include custodianship for trust and estate , share transfer facilities, asset management, registration of beneficial ownership , and other related arrangements. Therefore, to become a corporate agent, one must be responsible for all of these services.
Unlike trust companies which often support individuals (who are generally of high net worth) in managing personal assets, corporate agents will instead work closely with companies. Banks can act as agents to generate additional income.
This will diversify government or corporate revenue streams away from just the retail banking sector, as well as provide them with a more stable income base. Most of the services provided by corporate agents are non-credit. That is, the service does not involve extending credit.
In the contract, the relationship between the corporate agent and the business is predetermined. In many cases, there will not be complete free will for the corporate agent to execute all business decisions, but only in certain areas.
The corporate agent must confirm with the company before taking any action in the “gray area”.
Banks with Corporate Agent Services
Sinaumed’s, after getting to know more about corporate agents, here is a list of 15 banks that provide corporate credit services!
- PT Bank Central Asia
- PT Bank Danamon Indonesia
- PT Bank DBS Indonesia
- PT Bank HSBC Indonesia
- PT Bank ICBC Indonesia
- PT Bank Maybank Indonesia
- PT Bank Resona Perdania
- Standard Chartered Bank
- PT Bank UOB Indonesia
- PT Bank Mandiri
- PT Bank Negara Indonesia
- PT Bank Rakyat Indonesia
- State Savings Bank PT
- DKI bank
- MUFG Ltd Bank.
Examples of How Corporate Agents Work
In order to make it easier for us to understand the workings of a corporate agent more deeply, here’s an example of how it works in a story illustration. Let’s see together!
Corporate, fiduciary, depository, deposit, tender and exchange services, up to escrow are provided by the Agency and Trust Bank A Division. More than 3,000 clients served by this corporate agency, including financial, corporate, and government institutions.
The corporate agency division manages up to trillions of assets because it has a market share that continues to grow and advance. Opportunities were also seen by Bank A and the corporate division in making their bank a solution for various capital market transactions.
The nation’s capital and major cities on the island of Java, to developed countries are their main office locations. Bank A also has expertise both globally and locally due to its network of specialists and technical workers.
Governments or companies that use the services of Bank A’s corporate agents can request access to the latest technology on the market, such as programs for analysis to administrative reporting.
More specifically, Bank A’s corporate agents also perform structured financial services. That is, finances that are involved with each other such as debt repayment obligations. This is generally requested by companies whose financing is complex.
The task of managing various types of financial transactions according to the basic function of a bank is the duty of the bank to act as a corporate agent on behalf of the government or company.
Companies or governments can save money or time with the services of this agent. The reason is, they don’t need to recruit new people to carry out the tasks performed by corporate agents.
Example 1
Fiduciary, agency, safekeeping, safekeeping, tendering and exchange services are provided by Citibank’s Agency and Trust Division. Over 2,700 clients are served by City Agencies and Trusts, including financial institutions, corporates and public sector entities. This division also manages assets of more than USD 6 trillion as it operates in developed and developing markets.
It is not surprising that this division within the company sees itself as a single solution for various capital market transactions. Its main offices are also located in New York, London, California, São Paulo, Mexico City, Dubai, Moscow, Hong Kong and Seoul. Globally, Citi’s network of technical specialists and service professionals has expertise in country and jurisdictional local markets.
The clients of this corporate agency can receive access to the latest technology. Online management of Agency and Trust City investor reporting systems also gives clients direct access to detailed transaction information, along with customization around specific portfolios and automatic email updates.
Example 2
One of the trusted banks, Bank Z, offers a variety of financial services to its customers, from receiving, depositing, to borrowing funds. There are more than 10,000 Bank Z customers, both individuals and companies to government agencies.
PT ZZZ, one of his clients, has a clearing account managed by Bank Z. In fact, the registration of shares is also the same. This is what makes Bank Z can be called a corporate agent.
Corporate Agency According to Enterslice
A corporate agent is usually an organization or company that represents the interests of insurance companies. Therefore, corporate agents act in the best interests of insurance companies.
There are several guidelines that must be adhered to and followed by corporate agents. Corporate agents not only represent insurance company interests, but also sell insurance company policies.
To operate on behalf of an insurance company, a corporate agent requires a corporate agency license. A corporate agency license is required for an organization to act as a corporate agent. When a company sells auto insurance on behalf of an insurance organization, it is the corporate agent for that insurance organization.
Companies, as well as banks, can obtain a corporate agency Licence. Therefore, when a bank obtains this license, it will represent the interests of the insurance organization. This agreement is referred to as a bancassurance or partnership.
Financial institutions offer insurance plans to customers based on their needs. So, a corporate agent might represent one life insurance company, one non-life insurance company, and one health insurance company.
Corporate Agent Category
The following are several categories of corporate agents according to Enterslice :
- Life insurance corporate agent
- General insurance corporate agent
- Health insurance corporate agent
- Composite insurance corporate agent
Corporate Agency Scope
Corporate agents are companies that solicit, procure and provide services for various forms of insurance business. Once a corporate agent is licensed, they can service life insurance businesses, non-life insurance businesses, and health insurance businesses.
A corporate agent for a life insurance business may have agreements with as few as three life insurance companies to advertise, solicit, and purchase different insurance products.
A corporate agent for a general insurance business may have agreements with as few as three general insurance companies to solicit, advertise, and purchase various types of insurance products on behalf of the business.
Corporate agents for health insurance can only have agreements with three health insurance companies to advertise, purchase, and service their products.
Meanwhile, a corporate agent for composite insurance can have an agreement with a composite insurance provider for three years.
Why is a Corporate Agent License Required?
- To ensure that the corporate agent acts on behalf of the insurance business.
- To request products on behalf of an insurance business.
- Acting in the best interests of the life insurance, non-life insurance, and general insurance businesses.
- This license is necessary for adequate regulation to exist in the insurance business.
About Agent
Sinaumed’s, it’s time for us to know more about the term “agent” itself. Let’s listen carefully!
Agent Characteristics
The characteristics of the agent are as follows:
- Generally, the number of goods sold by agents is smaller than distributors
- The marketing area is not that wide
- Buying goods in large quantities to be resold to resellers
- The system for purchasing goods or services from distributors can be done by buying out or using a commission system
- Generally, agents do not serve direct purchases by consumers
- Can open opportunities for other parties to become resellers
- Only sell products from one manufacturer and may not sell products from competitors.
- Not always and does not have to be in the form of a business entity or have a business entity permit.
Agent Types
Below are the types of agents in general:
1. Supporting Agent
Supporting agents are a group of agents formed specifically for activities in several aspects of moving goods or services. The division includes wholesale transportation agents or bulk transportation agents , storage agents or storage agents , special transportation agents or specialty shippers , as well as sales and purchasing agents and sales agents .
These support agents carry out activities in the form of assisting the transfer of goods in such a way as to establish a direct relationship between the seller and the buyer. In other words, the function of a support agent is to serve the needs of each group simultaneously.
2. Complementary Agents
The next type is complementary agents, namely a group of agents whose function is to carry out various additional services in the distribution of goods. The goal is to correct existing deficiencies.
Complementary agents will replace related work related to the distribution of goods if the agency or trader cannot do the job
There are several services performed by complementary agents, including election services, financial services, information services, and special services.
It doesn’t just stop there, complementary services can also be distinguished based on the offers they make, which are divided into agents in the financial sector, agents who help make decisions such as advertising agencies, doctors, to institutions, agents in providing information such as television, newspapers, and radio, to other special agents who are not included in these groups.
Closing
That is the explanation regarding corporate agents which seem to have various functions and benefits for companies, especially the government. As we know, companies sometimes have too much focus, so they need separate assistance services to manage their finances or assets. This is why corporate agencies can be so useful and profitable.
Hopefully all of the discussion above can provide benefits as well as add to Sinaumed’s’ insight regarding corporate agents.
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