Big Things of ten have small beginning
Historically banks have not offered products to mass market customer segments, and have not developed the distribution systems to do so. Building these agent networks takes large teams and specialized knowledge. Agency banking has become an important avenue for growing access to banking services in technologically upward developing economies.
- A banking agent is a retail or postal outlet contracted by a financial institution or a mobile network operator to process client’s transactions. Rather than a branch teller, it is the owner or an employee of the retail outlet who conducts the transaction and lets clients deposit, withdraw, and transfer funds, pay their bills, inquire about an account balance, or receive government benefits or a direct deposit from their employer.”
Banking agents can be pharmacies, supermarkets, convenience stores, lottery outlets, post offices and many more.
In a growing number of countries, banks and other commercial financial service providers are finding new ways to make money delivering financial services to unbanked people. Rather than using bank branches and their own field officers, they offer banking and payment services through postal and retail outlets, including grocery stores, pharmacies, and gas stations among others. For poor people retail agents may be far more convenient and efficient than going through a bank.
Banking through retail agents uses information and communication technology through cell phones to transmit transaction details from the retail agent or customer to the Bank. The rapid growth in ICT that is being experienced in developing economies, especially in Africa, has triggered new innovations in all sectors, one of which is agency banking. Agency banking is the process of using an agent to deliver banking products to peripheral customers.