Banks and other financial service providers sometimes use agent networks instead of traditional branches to reach more customers at a lower cost. Agent networks may comprise an established distribution network, such as post offices or retail chains, or be built from independent, small-scale traders and other retailers. Agents often are able to conduct basic financial transactions, such as withdrawals, deposits, money transfers, and payments on behalf of banks, depending on existing rules and regulations.
Why Should Banks Adopt NanoBNK Agency Banking
- To include unbanked/underserved segment into the ecosystem and expand customer base profitably
- To provide banking to a larger customer base at low servicing costs – just as they want it
- To simplify business processes and to enhance efficiency
- To promote a cashless culture, and provide multiple products and payment facilities through a single agent
- Banks can lower the time to market for any new projects/services to their customer base within a small geography
- The agent network can be easily expanded to reach out to more people as and when required
Operating a bank branch is exponentially more expensive than employing an agent to offer payment services outside of a bank. But there’s more to financial inclusion than the ability to make payments. People need a full range of tools to support their families and businesses.
It’s not surprising that India, a country characterized by its openness to innovation and its focus on reaching underbanked and unbanked populations, has come up with many solutions. The Reserve Bank of India created business correspondents to offer accessible and affordable delivery channels for customers. These correspondents operate in partnership with financial service providers (banks and non-banking financial institutions), and they offer a broader range of products than just payment services — including money transfers, government subsidy payments, bill payment, international remittances, e-commerce, distribution of microinsurance, and even loan origination and servicing for financial service providers.
NanoBNK is addressing financial inclusion with innovation
NanoBNK is a unique banking correspondent focused on people who cannot be reached by traditional financial service providers. NanoBNK agency banking is a means for a traditional bank to cost effectively extend its branch network through the use of authorised agents. This enables the bank to provide low-risk services to customers in remote and rural areas that are difficult to service using traditional branches. The bank benefits through a larger customer base, boosting financial inclusion, product availability, and risk management.
The operation of Agency Banking is based on agents performing transactions on behalf of banked customers using a portable terminal (mobile phone, mobile EDC terminal etc.). These agents will have a stored value account (digital wallet) on the Novatti platform, and the platform will apply the defined business rules to transactions initiated by these agents. Customers can either have accounts on the core banking system, or a digital wallet on the Novatti platform, and the agent transacts on these accounts on behalf of the customer. The host system will apply the business rules for the customers’ accounts.
The platform allows agents to put cash into their wallets and get cash out of wallets using a broad set of business rules. Agents can use the service to transfer value from their stored value account to another stored value account, or a customer’s bank account. The transactions supported are:
- Cash deposit
- Cash withdrawal
- Merchant purchases
- Account balance queries
- Loan repayments
- Bill payment (utility bills, government fees, taxes, fines etc.)
- Prepaid top-up voucher sale
- Prepaid top-up (voucher-less)
Bank customers may also be issued with a magnetic stripe/chip card and a Bank PIN, and can then use this card and PIN to perform transactions. This requires the agent terminal to have the ability to read the data on the account card.
The primary benefits to the customer are security compared to managing cash, and convenience when compared to attending a traditional bank branch (the closest branch may be up to half a day’s travel away). The main benefits to the agent are driving increased foot-traffic through their shop or business, and the fee income created by handling the bank transactions.