1. IS AGENT BANKING
THE FUTURE OF
BANKING?.
G R O U P S E V E N ( 7 ) P R E S S E N T A T I O N
A look at how it is changing businesses, communities and
the financial institution providers
2. DISCUSSION
POINTS
Key topics covered in
this presentation
1. Introduction to Agent banking
i. What is Agent banking?
ii. Evolution of Agency banking in Nigeria
iii. How does Agency banking work.
2. Agent banking;The future of banking.
i. Is agent banking the future of banking
ii. The solutions agent banking has provided
iii. Major findings and statistics of agent
banking
3. INTRODUCTION TO
AGENT BANKING
Agent banking system simply means providing a certain level of banking and *
financial services to the customers through agents deployed and they are guided
by a valid agency agreement, they are appointed by financial institutions to carry
out transactions on their behalf, hence, ensuring optimal reach out to large number
of customers unable to move far distance for the services.
Agency Banking is a type of branchless banking that allows financial organisations
to extend the network and reach of their products and services cost-effectively
through authorised agents.
4. It has grown popular worldwide in the last decade, especially in countries with low
financial inclusion rates like Nigeria. Countries like India, Brazil, and Kenya have
drastically improved how people access financial services by introducing agency
banking.
In Nigeria — heralded in 2013 by the CBN as part of its financial inclusion strategy
— commercial banks have made it crucial to make their banking services reach a
more significant number of people than their branches can accommodate. For
example, last year alone, First Bank recorded $16.2B in agency banking
transactions.
FinTechs are also not left out. Startups like TeamApt, Nomba (previously Kudi), OPay
and Paga are also some of the leading agency banking networks in the country,
with TeamApt recently recording $3.5B in monthly transaction value with over
100,000 agents across the country.
5. Evolution
of Agency
Banking In
Nigeria
In 2009,the CBN approved the
guidelines on mobile money services
in Nigeria that covered models,agent
network,business rules,roles and
responsibilities of participants under
mobile money services in Nigeria.
In 2011 mobile money license was
issued and also MMOS started
deploying agents.Agent banking
guideline was issued in 2013 and
super agents guideline in 2015.As at
September 201,21 MMOs have been
licensed
In 2015,the regulator further clarified
the models for the deployment of
mobile money in two models which
:the bank led model and non bank
led model.
7. HOW DOES AGENT BANKING
WORKS
There is a striking similarity between the functioning of agent banking and mobile
banking. In agent banking, bank agents are trained and are provided with a mobile
phone as a POS terminal. The essential skills that will be imparted to them for providing
banking services according to the standards,that are set default by the bank. They help
customers in accessing to fastand affordable banking.
The common services provided by these agents include account opening,transfer,bill
payments,airtime /data too up balance Inquiry,collecting documents, mini statements,
and any other such services that are allowed by the bank. The Mobile App
DevelopmentCompany plays a critical role in empowering bank agents to perform these
tasks effectively.
8. AGENT BANKING; THE FUTURE OF
BANKING
Y
Agent banking is a tool for financial sector deepening because:
IS AGENT BANKING THE
FUTURE OF BANKING? S
E
¶ It increased number of branches: An amendment to the banking act allowed banks to
start using agents to deliver financial services.
¶ It enhanced accessibility to the banking services: Agent banks offer similar services as a
real bank.
¶ it encouraged wider market coverage and customer loyalty: Agent banking allows
banking services to be taken to area that would have remained unbanked for a longtime
due to economic factors.
9. AGENT BANKING; THE FUTURE OF
BANKING
Y
Agent banking will be useful to banks that wish to enhance their competitiveness.
It has proved useful in not only to expand the client base of banks but also in
enhancing the range of service absorption per client. It has significant cost and
financial benefits as well. It also enhance positive brand perception by more
clients especially if the mother bank is in control of the quality of services offered
by the agent
IS AGENT BANKING THE
FUTURE OF BANKING? S
E
11. Adopting agent banking offers several
benefits to banks, a few of which have
been
discussed below:
1. Financial inclusion
of the unbanked
segment is
facilitated, helping
banks to expand
their customer
base, thus leading to
better profitability.
2. Business
processes may be
simplified, while
efficiency can be
enhanced further
3. Efficient at agent
network expansion, agent
banking enables reaching
out to increased number of
people according to the
need.
4. Agent banking enables
banks to cut down on
marketing time related to
new services and projects
offered to customer base in
smaller locations.
5. A range of products
as well as payment
facilities through a
single bank agent is
possible.
6. Cashless culture is
promoted as wel
12. Adopting agent banking offers several
benefits to banks, a few of which have
been
discussed below:
7.Agent banking acts as a
means to serve wider
customer base under
reduced costs.
8.Empowering women and
making
them a part of the global
financial environment, agent
banking offers
ease.
9.Especially in rural vicinity,
women are encouraged to
use agent
banking on a large scale.
1. It serves as a source of
additional Income
2. It provides employment
opportunities
3. It promotes buisness
growth and recognition.
1. It is quick: no traveling to
the bank,no queues, fast
transaction processing.
2. It is affordable:
transaction fees are lower
than branch fees.
3. It is convenient: Agents
open longer hours than bank
Branches and are close to
where customers live, work
and shop.
4. It is simple: transaction
process is simple and no
forms are required.
To Agents To Customers
13. Digitalization is changing how people interact
and do business on a day-to-day basis, and
advancements in banking technology are
continuing to influence the future of financial
services around the world. An increasing demand
for a digital banking experience from millennials
and Gen Zers is transforming how the entire
banking industry operates.
MAJOR
FINDINGS AND
STATISTICS OF
AGENT
BANKING
It has also been discovered that In most of the
developed and developing countries in the world,
over 74% of online consumers are managing their
finances by making use of smartphones. More and
more people across the globe are comfortable
making large purchases by using the mobile
payment apps. Payment through cash and card
are steadily getting reduced gradually
all over the world.
15. *From 2017 to 2018, agent
banking saw a 122% growth in
Bangladesh.
*90% of users preferred to use
agent banking services as
compared to
mobile financial services. This is
due to higher transaction limits,
lower
costs and higher security
associated with agent banking.
*Average daily transaction
value was 360,000 Taka and
average daily e-float of
430.000 Taka was
maintained.
*60% of agents are yet to
breakeven.
*35% customers are women,
however
*In 2020, despite an increase in the overall transaction volume and
value, Nigeria failed to meet its National Financial Inclusion Strategy
(NFIS) target. Compared to her expected 80%, data by EFInA shows
that only 64.1% of the population were financially included.
*According to another 2021 EFInA study, while only 71% of urban adults
in Nigeria have bank accounts, only 40% of those in rural areas have
formal accounts. 60% of the rural communities surveyed do not even
have a bank branch, ATM, or other alternative access to essential
financial services.
*Yet, despite a slight improvement in its financial inclusion rate —
moving up to 64.1% in 2020 from 63.2% in 2018 — it remains apparent
that there is a significant gap in Nigeria’s journey to financial
inclusion. However, one of the ways organisations — banks and
FinTechs — have tried to close this gap is through agency banking.
*Nigeria has about 4 bank branches and 15 ATMs for every 100,000
adults.
16. Conclusively,With all this we can see that Agency
Banking has slowly infiltrated our banking culture.
For the everyday user, instead of going to a bank
branch or ATM, it is easy to walk up to their neighbour
(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.
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