Agency Banking is Bringing Financial Inclusion to the World

A new era of inclusion is here 

According to a report by The World Bank, an estimated 2 billion adults worldwide don’t have a basic banking account. Governments across the world are focusing on expediting financial inclusion to eradicate poverty and provide economic stability to all. However, 59% of unbanked adults cite unavailability of affordable banking services as the key reason for not having an account. A lack of banking services in rural areas or a tiresome documentation/onboarding processes are some other notable roadblocks. This high proportion of unbanked peoples has created a large addressable market for NGOs, governments and private sector providers for financial inclusion products.

What is Financial Inclusion?

Financial inclusion is an effort to bring all people regardless of their income level into a formal economy. It is important that no person; however poor, remains excluded from this ecosystem.

In developed urban locales, banks reach the customers by opening multiple branches and ATMs. However, opening a bank branch in rural/emerging markets requires high CAPEX/OPEX – and the branch does not generate enough ROI. It is one of the prime reasons why banks are not reaching the rural customers. It is difficult for a customer from the rural vicinity to operate a banking application and gain access to banking services on a mobile phone.

So What is the Alternative?

In such a scenario, an agent led model for banking can be a low-cost/effective vehicle to include a largely unbanked/underbanked rural population into the banking ecosystem. 

How can companies make banking easy for the underserved customer?

Banks and mobile money (e-money) providers can partner with technology innovation experts to launch an agent banking network and take their banking services to places where a bank branch cannot reach. Mobile Financial Solutions like Youtap are instrumental in setting up a branchless bank within the reach of potential customers. There is no need for complex infrastructure or a team of , branch managers, and executives. An agent looks after all the banking needs.

InclusionWhat is the upside to rolling out Agency Banking?

A smart device with biometric capabilities and a robust technology led agency banking solution to power the processes can be the difference between you and your competitors

The biggest E-Money providers in South East Asia, Africa and the Middle East provide compelling case studies as to the effectiveness of agency banking. MTN Group, Telkomsel and AWCC service over half a billion customers combined so being able to drive extra growth and reach and lower costs has been imperative to their respective strategies.

AWCC used Youtap’s youbank solution to roll out branchless banking to all 34 of Afghanistan’s provinces. The agents provide a lightweight banking presence where customers, both new and old, can conduct basic banking services such as mobile deposits and withdrawals, and account registration. This approach to extending their reach has meant that over 90% of the wider Afghan population can now access their services.

Apart from bringing the bank branch near to the customer, the transaction fees are also nominal. With the help of an agent, a person who has never carried out any banking transactions can do so with ease.

This approach is a great step to empower women and include them in the financial ecosystem too. In most of the developed countries, it is not possible for single mothers, pregnant ladies, and women who are senior citizens to walk down to a branch in some other city and carry out banking. What can be a better way to keep their money secure and allow them to be in charge of their own money than to provide them with an agency banking facility next door?

As a majority of the unbanked/underbanked population takes up agency banking and gets included into the financial ecosystem, it will not only affect them on a personal level but also lead to the country’s economic and social development.

If you wish to ‘go branchless’ and take your banking services to the most remote corners at dramatically reduced CAPEX/OPEX – contact our Agency Banking experts.