In light of the current Covid-19 crisis, we are already witnessing the emergence of completely new customer behaviors, such as the accelerated usage of digital financial services.
What will be the impact on Agency Banking?
Although life with the virus may be significantly different, Agency still has its place as a channel in cash-reliant economies. The perceived convenience of agents for customers will continue to drive Agency Banking usage even in the new normal of social distancing.
CGAP is also advising policy makers not to overlook the importance of agent networks at times of crisis, as they can have up to 20 times the reach of bank branches and seven times the reach of ATMs (GSMA and the University of Washington).
The primary function of agents has been to provide cash in/out services on behalf of a financial institution, but they can also be leveraged to deliver further beneficial value-added services (learn more about what agency banking is and what are its benefits in our previous blogs).
Financial service providers would need to think of ways to transform their Agency Banking channel to a low-touch solution while continuing to create a seamless experience for the customer.
How can financial institutions get Agency ready for low-touch?
Here are a few ideas:
1. Leverage the Investment in Agency by Enhancing Agent Services
Many agent banking models primarily focus on cash in/cash-out services, but agents can be strategically leveraged to provide additional services that traditionally are available only from branches.
Some examples of value-added services through agents include customer onboarding, remittances, bill payments, government cash disbursements, and more.
With many governments starting to distribute social aid, agents can be used as one of the crucial networks for its cash-in/cash-out. This is especially true in rural areas, where formal bank branches and ATMs have less penetration and where many of the more vulnerable, low-income populations reside.
In addition, financial institutions could take their low-touch agenda further by offering merchant services to agents that also operate as a merchant. This could be achieved by enabling digital options for buying goods and/or the support of contactless NFC and QR code payments at merchants/agents.
Agents could also be leveraged to onboard new customers, limiting branch interactions. With regards to making customer onboarding more low-touch, OCR (Optical Character Recognition) technology could be used to eliminate the manual capture of pages of KYC data and speed up the process at the agent. OCR enables the automatic capture of the most important customer information required for onboarding via a phone camera.
Financial institutions, in adherence to regulations, could also consider segmenting customers in light-KYC and full-KYC. Full KYC could be attained once there is a touchpoint between the bank and the customer through a phone call conversation or through any other allowed options. In this way, complete customer onboarding can be achieved, without the customer needing to go to the bank.
Light KYC effectively allows the customer to transact within certain limitations configured in the Agency Banking solution, such as lower value or volume of transactions.
2. Remote Agent Management & Guidance
Traditionally, agent managers are required to physically engage with their agent network to provide support.
As an alternative, messengers and chatbots could be used to reduce the amount of physical interaction needed between agent supervisors and agents. These digital tools can provide real-time agent support and guidance which ultimately results in a better customer experience and a stronger agent network.
Additionally, use of such digital communication channels also provides an opportunity to lower the cost of operating an agent network.
3. Agent Overdraft Credit to Support Rebalancing
Typically, rebalancing requires an agent to visit a bank branch which in these times needs to be limited.
Financial institutions could evaluate the feasibility of reducing the frequency of rebalancing by providing agent overdraft facilities. These facilities should be designed based on scorecards that utilise the transaction history of the agent to assess the creditworthiness of an agent.
This will keep the agents operational during these times of lower foot traffic to a bank branch and increase their loyalty with the institution.
4. Low-touch Authentication Methods at Agents
How a customer authenticates themselves with the agent can be one of the riskier interactions in terms of physical interactions. For example, those networks that rely on biometric verification now have to consider how to keep bio devices clean and safe to be used by multiple customers. To address this risk, priority could be given to low-touch authentication options instead of touch-heavy POS terminals and biometric devices.
Such low-touch methods could be the use of OTP, tap-and-pay cards, and other methods, initiated and authenticated by the customer via their mobile wallet or mobile banking app (for example, for the purpose of cardless withdrawals).
To make transactions at agents even more low-touch, where regulations allow, printed receipts can also be replaced by their digital counterpart - SMS.
5. Digital Onboarding of New Agents
The process of onboarding of new agents could also benefit from low-touch tools.
A mobile app can be provided to potential agents to initiate the onboarding by themselves or to assist the financial institution’s representative, reducing the need for paperwork for both parties.
Agent-submitted information could then be used for pre-screening, while the final approval of the relationship is concluded via a visit or a phone call, after which the agent can then start transacting.
The training of new agents can also be supported by digital channels or in-app training video.
6. Ensure Safety via Social Distancing & Hygiene Measures
To keep their agent network operating safely, banks need to ensure that agents are well-trained on any recommended social distancing and hygiene measures. Digital communication tools can again be leveraged to achieve this completely remotely.
As a direct point of contact with end customers, agents have developed trusted relationships with their communities. Often, therefore, their role also entails educating customers about financial service options. In the current COVID-19 crisis, agents could also help communicate any critical measures that will help limit the spread of the virus and keep everyone safe.
For many economies in the developing world, cash is still king and Agency Banking has its place as a channel enabling financial inclusion. So thinking and moving ahead of time, lower-touch agency banking will help maintain this customer-centric channel, and support its growth in the newly emerging landscape of social distancing and digital finance delivery.
At Software Group we are committed to helping financial institutions ensure continuity of service today, while positioning themselves strongly for the digital tomorrow.
Please do not hesitate to contact us about implementing low-touch Agency Banking as well as other innovations you would like to consider for your institution as you get ready for a post-COVID world.
