Banking Through Networks of Retail Agents

This note explains how the banking agent model works, and how it can help banks achieve broader and deeper outreach.

To achieve universal access, banks need to adapt their systems to low-value, high-volume transactions. They also need to build retail networks of points where people can pay into or cash out their accounts. Such retail networks act as banking agents, help the bank reduce distribution costs and also control risks. The paper explains:

• Economic role of agents;
• Agent support to banks’ commercial and channel strategies;
• Process of setting up and growing agent networks;
• Business case and remuneration model for agents.

Finally, a bank’s main challenge in developing an agent model is to understand how this new channel fits within its customer segmentation, service proposition and branding objectives. Banks should support agents by:

• Educating potential customers in finance;
• Developing products that tackle customers’ economic needs and means;
• Reaching customers with effective marketing;
• Putting in place a mechanism to check customer identities.