Agency Banking is a branchless banking that allows banks and financial institutions to extend the network and reach of their products and services cost-effectively through authorized agents.

On behalf of banks, an agent offers simple banking services like deposits, withdrawals, transfers, and bill payments to customers without needing a bank branch.

Agency Banking has become popular globally in the last decade, especially in countries with low financial inclusion rates. Countries like Asian and African countries have drastically improved how people access financial services by introducing agency banking.

In Nigeria — heralded in 2013 by the Central Bank of Nigeria (CBN) as part of its financial inclusion strategy — commercial banks have made it crucial to make their banking services reach more people than their branches can accommodate.

Nigeria has about four bank branches and 15 ATMs for every 100,000 adults.

Agency Banking has slowly infiltrated the BFSI culture. For the everyday user, instead of going to a bank branch or ATM, it is easy to walk up to their neighbor (who is an agent) and perform their basic transactions with them. For the banks, it significantly reduces the traffic at their branches and makes expansion cheaper when they no longer have to build new branches to penetrate more locations in rural and urban areas. Rural communities no longer get excluded because of the lack of bank branches or ATMs; one kiosk at the edge of town brings banking to their doorstep. Depending on the provider, financial services like lending, deposits/withdrawals, bill payments, or savings are closer than ever before, at no extra cost to the customer or the provider.

Advantages of Agency Banking

Reducing operational expenses

It offers lower operational costs for banks and financial institutions. Agency banking boosts financial inclusion by extending banking services to the underbanked, unbanked, and underserved populations. This kind of banking offers more flexible and convenient access to existing and new customers.

Extended banking services

Agency banking also includes extending banking services to the lower strata of society via an authorized agent. Through this type of banking, the banking sector pulls various resources together to offer these services while reducing the expenses involved.

Fast service

Local shopkeepers and merchants in the agent banking network offer essential banking services. 

Helping the economy grow

Agents offer financial services to small businesses and individuals required to boost economic growth and local development. Agency banking serves as a win-win option for every party that is involved.

How does Agency Banking work?

It is easy for anyone to be an agent. Because of the expensive cost of setting up and maintaining a branch for expansion, the banks invest a lot of time and effort in recruiting agents as an alternative.

Typically, Banks will sign up the agents directly or through any agency, and then those agents have to complete all their requirements and regulations, receive their account details, set up devices, and set to go! Attracting customers to perform transactions then becomes a day-to-day job.

Banks will need an ecosystem to onboard and manage these agents to offer agency banking services to their customers.

Equity Bank in Kenya has implemented one of the most successful agency banking programs, with over 53,151 agents serving over 15 million customers. Similarly, Ecobank in Nigeria has established a vast network of agents, reaching over 50,000 agency banking locations.

Agency Banking relies heavily on a reliable tech infrastructure to work adequately. Deposits, withdrawals, transfers, bill payments, POS issuance, etc., are made possible with complex API integrations across multiple parties in the ecosystem.
A new player would need to invest a great deal of time and spend an outrageous amount of capital on hiring and setting up a tech team to build this infrastructure from scratch — increasing the time to launch by a great deal.

A big problem, we know! So, we solved it for you.

About Modefin Agency Banking Platform

Built on our suite of Omni channel Banking, Modefin offers licensed banks and companies a fully-featured no-code tool to help you get started with their agency banking services in less than two weeks.

With the Modefin Agency Banking Solution, banks can build an ecosystem that manages a well-equipped agent network to help customers withdraw cash, deposit cash, and perform bill payments — all from a POS.

The bank won’t need to build the tech infrastructure from scratch. Save money, save time, and launch faster.

With Modefin solution, we allow you to scale your financial services beyond the constraints of your branch, available staff, and capital. Gain access to automated settlements, detailed tracking and reporting of all your agents, 24/7 customer support, and technical support from us.