The ongoing Fourth Industrial Revolution is a technological transformation which is changing the way we live, work and communicate. It is changing every aspect of our society and economy, including the banking sector. 44 % of the Sub-Saharan Africa population subscribed to mobile services in 2017. By 2025, the number of subscribers is expected to grow to 52 percent, and 87 percent of those subscribers are predicted to have mobile broadband access. Global Findex survey revealed that significant progress has been made in financial inclusion driven by a new generation of financial services accessed through mobile phones and the internet. Still, with 57 percent of its population lacking any form of bank account, Sub Saharan Africa remains the region with the greatest potential for the adoption of Digital Financial Services.
Reaching out to the underbanked customers with the traditional bank distribution model at a cheaper cost is very difficult in emerging markets as the territory is wide and they will have to educate people first on the benefit of the service. Branches are located far away from rural areas and people spend hours in long queue lines. Hence, to solve the issue of delivering financial services to the unbanked populations, banks and the financial institutions have realized that they need to close the gap between the branch and the customer.
Therefore, the banking sector turned to an agency banking model which relies on agent networks to provide personal service and trusted client relationships. This will help close the “last-mile” gap. Agency banking is considered as an important avenue for growing access to banking services in developing economies. The banks besides activating new bank accounts in real-time, are able to build a sustainable and data-driven agent network, with tools to improve the field of operations, and also enable deeper financial inclusion. In this way, banks are able to get end-to-end visibility of the agents’ network with data analytics to support business decisions. For Instance, Equity Bank, which is one of the largest Pan-African banks, has created a new channel using Agent networks in order to reach a large pool of clients living in remote areas of DRC Congo. The adoption of this new banking model has generated better sales results, witnessed an increase in market share and growth in sales of high-value financial services to thousands of new customers in a more secure, quick and easy way.
Banking Institutions have overcome many external and internal challenges and are more successfully running their operations through agent networks. The role of agency banking helps in enhancing financial sector deepening into unbanked markets across Africa.Most importantly, this model has proved to be useful to banks that wish to enhance their competitiveness and also expand their client base.
Partnering with NanoBNK
NanoBNK partners with Banks to deliver Digital Transformation and omnichannel presence through its Digital Banking solution which also includes Agency Banking solutions.