The combined impact of internet and smartphone adoption has benefited the financial ecosystem and particularly the banking industry. It has given banks the flexibility to provide their services to the unbanked or underbanked through a wide network of agents. The agents are usually local retailers authorized to execute different banking services on behalf of banks and financial institutions. These agents can also recruit other agents to work with them and earn small commission on each transaction they execute.
A user-friendly agency banking solution allows the banking agents to access numerous banking services and conduct various operations. Out of the $2.1 billion daily transactions that take place across the world, transactions of $500 million are conducted digitally through mobile banking agents.
The availability of digital financial services in Africa and Asia heavily relies on the concept of agency banking. Agent networks with a broader geographical footprint and penetration in rural areas are employed in this branchless banking approach to effectively deliver seamless banking services to a larger number of consumers.
However, employing agents alone is not sufficient for the success of this Alternative Delivery Channel (ADC). There are several roadblocks in the path to deliver effective agency banking services, such as managing liquidity, building agent network, and monitoring compliance adherence of agents. Selecting the perfect agency banking software is critical to achieving desired business objectives to enable agency banking services.
Here is the list of five crucial points to be considered before selecting an agency banking software:
Ease to Perform Field Activities
The agency banking software should be flexible to market requirements and challenges, such as limited access to rural places, inadequate technological infrastructure, and weaker internet connectivity. An offline mobile solution is critical for gathering data and saving the information of customers. It will also ensure that agents can deliver services even when there is no network coverage.
Another consideration is the undocumented population. In growing economies, a considerable proportion of the population lacks a formal identity, making it more difficult for agents to provide comprehensive financial services due to security and regulatory reasons. This type of KYC procedure necessarily requires the use of software that is accessible with biometrics devices and allows to gather client data such as ID information, pictures, signatures, and so on.
Compliance and Regulations
Acquisition of the personal information of customers is a tricky issue. As a result, in many countries, authorities enforce the rules for the protection of individuals' data, as well as heavy penalties on financial companies that fail to comply. Owing to these compliance requirements, the agency banking software should be modified according to the legal data management regulations of the countries where financial services will be offered through agency banking.
Many software store data on cloud servers located in other countries. However, most regulatory authorities don’t allow the storage of data outside their national borders. The agency banking software has to make sure that the customer data is stored within the national boundaries and allow and the alternative option of on-premises installation.
Monitoring Field Operations
Lack of field activity insights can cause serious trouble for banks delivering services through an agent. Managing and controlling in-field activities of agents helps to provide a comprehensive picture of daily operations such as:
- Performance of agents
- Analytics dashboards with the channel’s KPIs
- Geographic location of agents’ activities with GPS location
- Training program
Technologies and functionalities capable of delivering comprehensive information about field performance prevent misconduct that might affect the company's brand. These capabilities also help in liquidity management. If the software platform provides real-time liquidity overviews, displaying all data regarding cash under control and paid commissions, it can effectively monitor liquidity, avoiding cash shortages, and agents can manage resources accordingly.
Easy System Integration
Technical IT complexities can immediately result in legacy system failures, as well as poorly executed integrations across interdepartmental systems. An API that integrates the core banking system with agency banking software helps in the successful transfer of data.
The integration must allow for seamless information exchange across systems, ensuring both the systems are up to date with the appropriate data. Smooth system integration enables an efficient flow of data throughout the firm helping organizations to be data-driven and achieve long-term goals.
Reports and Analytics
The capacity to generate reports is critical for channel analysis, forecasting, and business overviews. Almost all agency banking systems promise to provide channel digitization, but it is not sufficient. The system should not be limited to the collection of solutions for multiple requirements. For instance, a different system of the customer onboarding process and another system for KYC.
Many agency banking systems lack reporting functionality and make data crossover almost impossible. A solution with comprehensive capabilities and resources is effectively integrated and ensures cross-reporting capability for useful insights.
Get Going with the Perfect Agency Banking Solution
Versatility is becoming more crucial. In an evolving financial services ecosystem, it is highly important to choose an agency banking software that allows to upscale services and offers new features as the business expands.
Agency Banking Solution offered by Panamax allows banks and financial institutions to operate a business in remote areas without incurring any significant infrastructure costs. The solution also offers a user-friendly interface and allows multiple agent registrations. Our agency banking software is capable of cash management, marketing, branding, operating services, license, and regulatory compliances for services.