Bridging the Gap: How Agency Banking is Opening Doors for the Unbanked & Underbanked Population
Understanding the Need for Agency Banking
Proof that shows the rapid growth of Agency Banking in Developing Countries
- In China, with over 1 million Service Points and 500 million transactions, Agent Banking achieved coverage of 97% in rural areas in 2018.
- In Colombia, The number of agent points reported by financial institutions increased 33 times between 2007 and 2018, from 3,500 in 2008 to more than 116,000 in 2018.
- Agents in India are also referred to as Business Correspondents (BC). With the Central Government focusing on financial inclusion, the rural BC count has increased from 34,174 outlets in 2006 to 531,229 in 2016.
- In Indonesia, Three categories of agents – Laku Pandai (LP) for financial inclusion, Layanan Keungan Digital for e-money services by banks and non-banks, and Fintech Agents for digital payment solutions. LP and LKD agents numbered 1,004,547 and 385,000, respectively, for 2018, while Fintech Agents numbered 6,200,000 in 2019.
- Since 2007, agents’ growth has outpaced all other channels in Kenya, and 31% of appointees are in rural areas. The total number of Bank and mobile money agents was 190,000 in 2019. Appointment of new agents, especially in the sparsely populated frontier, has been indicated as a priority.
How do Agency Banking services help foster Financial Inclusion in Emerging Markets?
Growth of business
- Improve access to financial services in line with Bank’s corporate philosophy
- Attract New Members
- Make it easier for customers to access Bank services closer to their home
- Increased branch revenue
Reduce the Total Cost of Ownership for our branch network
- Reduce the cost of providing financial services to Bank customers
- Leverage the infrastructure that Agents already own and reduce associated costs
- Reduce branch operating costs, e.g., lease, utilities, security, maintenance, etc.
- Competitive positioning in the Banking industry
- Position ourselves for the convergence of telephony and financial services
- Neutralize advantage of other Banks: Coop – SACCOs, Post offices
Take advantage of a changed regulatory environment.
Agency Banking Delivery Channels Journey
USSD as Channel for Agents to perform Transactions
- A limited number of Services can be offered on this Channel
- However, this Channel is still very popular in Africa and is mostly controlled by Telecom Operators
Mobile App on Smart Phones
- An unlimited Number of Services can be offered on this Channel
- Advance Services like Account Opening, Ticket Booking, etc., can be enabled on this Channel
- The only Limitation is for acquiring Card Transaction; you need to use an additional Card Reader, i.e., mPOS Device
- Transaction Receipts can be sent as an SMS/email or printed by connecting an additional Thermal Printer
Smart Android POS
- Same like Smart Phone, all advanced services can be enabled on this Channel
- Comes with an inbuilt Card Reader & Thermal Printer for Receipt Printing
Modefin Agency Banking Solution to Expand Your Business
By establishing a strong agent network model to serve the rural and unbanked people, we create an Agency Banking solution that enables banks and financial institutions to avoid spending money on physical branches.
Also, our Agent Banking Application mitigates risks such as cash theft, identity theft, errors, or instances of fraud by deploying software safeguards such as two-factor PIN authentication (Card + PIN), re-authentication after defined session periods, SMS confirmation of transactions, unique identification code for customers, and encrypted communication.