Agency banking is a very cost-effective way for banks and financial institutions to extend their services in the areas that have lower penetration of banks e.g. Rural areas. Also, banks are facing a hard time conducting their operations with Covid19 pandemic impact because many people fear going to the banking hall to queue. In this critical situation, the agency banking solution comes to rescuing the banks and financial institutions.
Banks and financial institutions can kill two birds with one stone with Agency Banking. First, they can increase their profitability by driving business from the areas which are previously untapped. Second, they can save the cost required to set up a new physical branch as maintaining a physical branch is costlier than managing the network of agents.
Today we are going to look at four benefits of agency banking:
- Support for Various Transactions
It supports various types of transactions, such as voucher-less prepaid top-up, top-up prepaid voucher sale, loan repayments, account balance queries, merchant’s services, cash withdrawals, cash deposits, transfers, and bill payments of various types, such as fines, taxes, government fees, utility bills and more.
- Real time transactions
Agency banking allows customers to access their funds on an immediate basis, enables them to check the status of their cheques, also a customer can complete its banking transaction in real-time. It helps financial institutions make their payments on time.
- Top-notch Security
Branchless banking solution offers top-notch security to their customers. Bank customers may be given a bank PIN and a magnetic chip card that they can use to transact at the agent’s store. Compared to cash management, bank PIN and magnetic chip card are more secure.
Agents can drive more customers through their business or store, and that’s their main benefit. Agents can provide a number of digital, and financial services to their customers and expand their customer base towards their business. Well-structured and executed agency banking solutions provide people easy access to digital services and digital identities.
- Increasing Customer base
Banks and financial institutions with the help of banking agents can finally offer their services to a large section of untapped customers. With agency banking, the banks can have a large number of agents under them which can, in turn, bring more customers to the bank and financial institutions.
- Supports Contactless Payments
Agency banking allows banks and financial institutions to conduct their operations using contactless payment solutions e.g. QR codes for avoiding human touch.
This has really helped during this time of Covid-19 because customers can share digital receipts via email or SMS to its customer instead of the printed ones.
In conclusion, agency banking solutions play an important role and changing financial institutions. The automation of banking services is increasing the range of the banks in numerous folds. Banks also have the authority to provide services to an individual in their place.
Customers can now take advantage of home banking services. Thus, agents find an additional source of income and they are also motivated to contribute to economic growth.
By Carolyne Rabut