The emergence of the Banking-as-a-Service (BaaS) business model has enabled non-banks to offer banking services by embedding financial services under their umbrella of digital financial services. Now, financial service providers (FSPS) are implementing strategies to harness/build their BaaS portfolio using tools like agency banking. How can you seize this opportunity for expansion and growth?
Agency Banking software is a technology that enables banks to provide banking services through third-party agents or outlets. These agents are typically located in underserved or rural areas, where traditional bank branches may not be present or easily accessible. By using agency banking software, banks can reach unbanked or underserved populations in these areas and provide them with access to financial services such as deposits, withdrawals, and loans.
As a BaaS strategy, agency banking software can be a valuable tool for banks looking to expand their reach and address the needs of underserved populations. By leveraging the network of agents and outlets provided by the agency banking software, banks can offer BaaS services such as account opening, account management, and transactions to customers in remote or hard-to-reach areas. This allows banks to reach new customers and increase their customer base, while also providing a valuable service to underserved populations.
So, how can banks implement an agency banking software solution as part of their BaaS strategy?
Here’s a step-by-step implementation checklist:
Identify your anchor use case and target market
Target underserved or unbanked populations that you want to reach with your offering. Build your strategy around an anchor use case: P2P, such as internal remittances to city centers; G2P, such as subsidies, payroll, or government agri-loans; Assisted e-commerce, such as basic inputs, bill payments, or other product mixes beyond CICO.
Segmenting agent types into farmers, micro-merchants, and distributors can be a good starting point to determine your go-to-market strategy. This will help you determine the locations and types of agents or outlets you will need to partner with.
Conduct detailed research before selecting a reliable agency banking software provider that matches your goals and objectives
Choose a reputable agency banking software provider: Research and compare different agency banking software providers building a feature matrix comparison to find the one that best fits your needs. Consider factors such as cost, features, integration capabilities, experience, offline capacity, and cash management.
Companies like Papersoft support a trial model, allowing you to test your market before and reduce your risk.
Partner with agents or outlets in the target locations to provide BaaS services to customers on behalf of the bank
Set up partnerships with agents or outlets: Identify and sign agreements with agents or outlets in the target locations. These partners will be responsible for providing the BaaS services to customers on behalf of the bank.
Validate existing trading routes in the selected territory. By leveraging existing partners that are knowledgeable about the region, you can outsource your activation force; this may be less risky than outsourcing to recruitment firms.
Properly train agents and outlets on how to use the agency banking software and operational procedures
Train agents and outlets on the agency banking software: Ensure that all agents and outlets are fully trained on how to use the agency banking software, sensible customer data, claims management and access support to ensure a smooth implementation.
Setting agent profiles and running them through a scoring system can create adequate gamification to help the agent business break even. Beyond transactional capacity, consider adding features like training tests or ANM quality checks.
Plan and execute a launch strategy for your BaaS offering, which may include marketing campaigns and promotions to attract customers
Once all necessary preparations have been made, launch your offering to the target market. This may involve marketing campaigns, promotions, and other efforts to promote the services and attract customers.
For your operation to run smoothly and maintain client trust, field coordination that assures network management and cash management tools like e-float overdraft and cash notifications are essential. Additionally, monitoring real-time business analytics KPIs, implementing chat-assisted claim support, and the capacity to maintain composure will help to reduce churn in the long run.
By following these steps, banks can effectively implement an agency banking software solution as part of their BaaS strategy, providing valuable financial services to underserved or unbanked populations and driving growth and innovation in the banking industry.
Want to know more?
We are here to assist you learn more about agency banking software and how using it can enable you to successfully leverage a BaaS strategy. Papersoft is among the key players with Agent Model solutions.