Originally published in The East African.
The global pandemic has asked a lot of questions, and in many ways we are still piecing together the best answers. It has shown us the weakest places in our financial ecosystem, it has changed market dynamics overnight, it has forced us to re-think a lot of what we do, and why we do it. On the positive side however, it has also shown us which strategies are more resilient and relevant.
While the ever-developing mobile wallet market in Africa is of considerable focus in the immediate need to be “contactless”, our efforts behind the super app evolution cannot come at the exclusion of the needs of the market majority right now. What solutions create the bedrock that we can build (and re-build) on?
The crisis showed that the Agency Banking model is now more relevant than ever. Sitting at the crossroads of digital channels, digital transactions, and the financial marketplace in Africa it is still where person to person interaction mixes with the digital products and the efficiency of digital delivery. It is where the very un-digital unbanked, the semi-digital underbanked, and the fully digital smartphone owner all share common ground.
So, if digital maturity is a continuum, it is agency banking that connects more people from different stages of that continuum than most other digital channels. From customer onboarding, cash in/ cash out, transfers, airtime top up, bill payments and remittances, to pre-approved nano loans and micro insurance – only Agency banking enables these functionalities across customer segments. And given the sheer market size in Africa (350 Million people unbanked – 17% of global total – World Bank) it will remain a driving force for transactions on the continent for some time.
Agency Banking is used by governments to disburse pensions and government support in the hard-to-reach places, by banks to drive transactions at scale and to gather data on their customers demand to shape new market relevant products, and by consumers to get their banking or bill payments done conveniently when they go to the store to buy bread and milk.
In the COVID era it effectively disburses crowds from central points of sale or branches and is far cheaper and easier to implement than expansive ATM networks. CGAP even points out Agency Banking as “vital” to COVID-19 response and advises policy makers on how to ensure agents reach as many people as possible during and after the crisis.
But the future of Agency Banking holds even more. The visionary, tech savvy leaders already know that isolated channels are a thing of the past. They take the platform approach to Agency Banking which not only enables them to meet customers where they are and establish the relationship, but also to gently convert them to other digital channels.
In our experience – when placed at the center of a financial service provider’s platform strategy Agency banking has driven 300% increase in transactions over a 3-year period and a 600% increase in transaction value. With this base one can easily extend new channels and features that connect in to drive even further innovation.
Simply put, Agency is a critical platform that drives consumers down the digital continuum and in so doing builds their loyalty and adoption of other solutions like Mobile Wallets or digital account opening solutions, and the Omni-channel use of them all (the Super App).
In this light Agency Banking is something extraordinarily strategic which should be re-examined in any bank’s digital strategy for the foreseeable future. This is especially relevant with the interoperability movement across Africa and the rapidly developing adoption of mobile money. As more cross border remittance solutions as well as many of the national and multinational switches come online, agent locations will be a place for customers of any bank to transact – they will not be limited to their “own” agent networks.
Imagine a marketplace that is setup at an important crossroads – a bank can set up a store of its own at the crossroads and sell only its own products, or it can own the real estate the roads and shops are built on to enable all synergies that the commerce creates – those that understand this analogy are at a great advantage.
The onset of the Global Pandemic has sent many financial service providers into a cycle of active pause, followed by a strategic rethink and then a restructure, not to mention force Majeure clauses changing overnight. What is the correct product mix? Agency, sitting at the digital engagement crossroads is still going to find its way to the core of any financial service provider’s digital vision, but future proofing it comes with the realization that standalone digital channels and digital engagement are a thing of the past.
Success comes with putting customers first and creating an entire financial ecosystem around them – providing the most relevant products and services, even if some of them are not your own or go beyond banking.
Africa needs this pathway to drive change and opportunity – if digitization is a highway we need to plan the best and most effective onramps for everyone so that they may complete the journey. Agency is still a key onramp in Africa and is more relevant than ever – it is the platform that began the digital journey in Africa and it will be the platform that we build upon for the future.
The global pandemic has asked a lot of questions, and in many ways we are still piecing together the best answers. It has shown us the weakest places in our financial ecosystem, it has changed market dynamics overnight, it has forced us to re-think a lot of what we do, and why we do it. On the positive side however, it has also shown us which strategies are more resilient and relevant.
While the ever-developing mobile wallet market in Africa is of considerable focus in the immediate need to be “contactless”, our efforts behind the super app evolution cannot come at the exclusion of the needs of the market majority right now. What solutions create the bedrock that we can build (and re-build) on?
The crisis showed that the Agency Banking model is now more relevant than ever. Sitting at the crossroads of digital channels, digital transactions, and the financial marketplace in Africa it is still where person to person interaction mixes with the digital products and the efficiency of digital delivery. It is where the very un-digital unbanked, the semi-digital underbanked, and the fully digital smartphone owner all share common ground.
So, if digital maturity is a continuum, it is agency banking that connects more people from different stages of that continuum than most other digital channels. From customer onboarding, cash in/ cash out, transfers, airtime top up, bill payments and remittances, to pre-approved nano loans and micro insurance – only Agency banking enables these functionalities across customer segments. And given the sheer market size in Africa (350 Million people unbanked – 17% of global total – World Bank) it will remain a driving force for transactions on the continent for some time.
Agency Banking is used by governments to disburse pensions and government support in the hard-to-reach places, by banks to drive transactions at scale and to gather data on their customers demand to shape new market relevant products, and by consumers to get their banking or bill payments done conveniently when they go to the store to buy bread and milk.
In the COVID era it effectively disburses crowds from central points of sale or branches and is far cheaper and easier to implement than expansive ATM networks. CGAP even points out Agency Banking as “vital” to COVID-19 response and advises policy makers on how to ensure agents reach as many people as possible during and after the crisis.
But the future of Agency Banking holds even more. The visionary, tech savvy leaders already know that isolated channels are a thing of the past. They take the platform approach to Agency Banking which not only enables them to meet customers where they are and establish the relationship, but also to gently convert them to other digital channels.
If digital maturity is a continuum, it is agency banking that connects more people from different stages of that continuum than most other digital channels.
In our experience – when placed at the center of a financial service provider’s platform strategy Agency banking has driven 300% increase in transactions over a 3-year period and a 600% increase in transaction value. With this base one can easily extend new channels and features that connect in to drive even further innovation.
Simply put, Agency is a critical platform that drives consumers down the digital continuum and in so doing builds their loyalty and adoption of other solutions like Mobile Wallets or digital account opening solutions, and the Omni-channel use of them all (the Super App).
In this light Agency Banking is something extraordinarily strategic which should be re-examined in any bank’s digital strategy for the foreseeable future. This is especially relevant with the interoperability movement across Africa and the rapidly developing adoption of mobile money. As more cross border remittance solutions as well as many of the national and multinational switches come online, agent locations will be a place for customers of any bank to transact – they will not be limited to their “own” agent networks.
Imagine a marketplace that is setup at an important crossroads – a bank can set up a store of its own at the crossroads and sell only its own products, or it can own the real estate the roads and shops are built on to enable all synergies that the commerce creates – those that understand this analogy are at a great advantage.
Agency is still a key onramp in Africa and is more relevant than ever.
The onset of the Global Pandemic has sent many financial service providers into a cycle of active pause, followed by a strategic rethink and then a restructure, not to mention force Majeure clauses changing overnight. What is the correct product mix? Agency, sitting at the digital engagement crossroads is still going to find its way to the core of any financial service provider’s digital vision, but future proofing it comes with the realization that standalone digital channels and digital engagement are a thing of the past.
Success comes with putting customers first and creating an entire financial ecosystem around them – providing the most relevant products and services, even if some of them are not your own or go beyond banking.
Africa needs this pathway to drive change and opportunity – if digitization is a highway we need to plan the best and most effective onramps for everyone so that they may complete the journey. Agency is still a key onramp in Africa and is more relevant than ever – it is the platform that began the digital journey in Africa and it will be the platform that we build upon for the future.
