In the first article of this series, we discussed “How Alternative Delivery Channels promote financial inclusion” and their influence in low income economies. Today, we are going to compare different variables across the Alternative Delivery Channels (ADCs), highlighting Agents and Rovers as excellent drivers for branchless banking.
Agents and Rovers
Proximity, convenience, assistance, credibility and simplicity are critical to successfully attract and efficiently provide financial services to clients and geographies previously unserved. So among the Alternative Delivery Channels available, what are the most effective ones? In rural areas, agents and rovers are definitely a great option and are the most familiar channel to clients (as compared to branches or mobile apps). They are often valuable and trusted members of the community in which they work, guaranteeing a high level of customer experience and adoption which would be difficult in a 100% self-service channel. Let’s take a look at them.
Agents are people authorized to act on behalf of a Financial Services Provider. They perform transactions such as collect payments, manage cash-in/cash-out, collect documents for account openings and manage loan origination: often these transactions are enabled by a mobile device. They serve clients in an outlet or in the street (clients come to agent’s location).
Rovers are people that may or may not be associated to a particular branch and can manage deposits or handle account openings (other than loan origination). They assist clients in their place of residence or business (rovers come to client’s location).
Alongside improving customer experience and generating operational advantages (which we will explore further), agents can also vouch for newly onboarded agents and serve as mystery shoppers in hard-to-reach areas, collecting relevant Know-Your-Customer (KYC) information for the Financial Services Provider.
Alternative Delivery Channels vs Branch-based Banking Services
In the table below, we match each channel with critical variables, income segment and average transaction value:
Let’s now analyze some important data from the table to help us decide what is (are) the more suitable ADC(s).
If we think about convenience, agents are closer to clients’ homes or place of business and are trusted members in their communities. They can establish a personal and lasting relationship with clients, assisting them with product info and helping them perform their first transactions. All of this facilitates a positive customer experience and high level of satisfaction.
Also, the brand interaction is more valuable because they are official representatives. The agent’s range of operations is wider compared to other ADCs, since they can also deliver cash and mobile money services. Finally, because of their KYC knowledge, the agent can easily segment and onboard the customer.
In terms of proximity, agents are usually operating within a community or in a nearby town with limited coverage; therefore, the expenses to reach them are lower when compared to other ADCs (both in terms of transportation and time). This contributes to lower adoption costs. It also enables agents to help customers to understand banking operations and improve their financial education.
Roving staff presents the singularity of being a “push” channel, or the only staffed channel going to the client instead of having them going to a service point (which is the scenario when clients visit agents). Rovers have a personal and permanent relationship with various communities. They are trained in banking services and are capable of educating existing and potential customers on the product (cash and mobile money transactions). They are equipped with promotional materials – like posters and branded stands – thereby reinforcing credibility, attraction capacity and trust.
Rovers remain the least costly and time-consuming banking channel for customers, with no monetary or opportunity cost to perform a transaction. As they are mobile, they can reach locations with seasoned demand, identify unserved hard-to-reach areas and prospect for new agents. If an agent network is already deployed in the region covered by the rover, he or she can serve as a mystery shopper to assess an agent’s compliance.
100% tech-based channels like mobile apps and internet banking guarantee full coverage/proximity by reaching almost everyone. The problem is that they both have huge adoption costs. The same can be applied to USSD menus and ISV services, which is a common delivery method from mobile money service providers. These channels – which have no human intervention – fail to provide financial literacy. To adopt them, the customer first needs to be educated about the benefits of having a bank or mobile money account. Second, the client needs to have assistance on how to perform basic operations, like transfers and payments. Lastly, the user needs to be encouraged to use his account when managing their finances in day-to-day life.
Using agents and rovers to reach clients in rural areas is critical for enabling Digital Financial Services providers to not only to expand their customer base but also to keep it active. Technology is crucial in facilitating agent’s, rovers’ and providers’ business – augmenting and enhancing the advantages of convenience and assistance that only humans can give.
One main characteristic separates agents and rovers from the rest of the ADCs: as humans, they have the power to make a difference in the financial literacy of the consumers and have the ability to promote active account usage, actively contributing not only to financial inclusion but also for economic empowerment.
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