Agent banking: new frontiers in financial inclusion.
Banking today is not restricted to banking organizations alone. Several non-banking institutions from unrelated verticals like telecom and retail are stepping into this space by
offering financial products and services like mobile wallets and white-labeled loan products.
Despite operating in a niche, non-banking institutions are very much in competition with regular banks. Take Wal-Mart in the United States, for instance. Although it does not run a
full-fledged bank, it gives other banks a run for their money by providing personalized financial services at its Money Centers. What is significant is that Wal-Mart attracts not only
unbanked customers, but also those with existing bank accounts.
Why agent banking?
Many banks and non-banking financial companies around the world, have discovered the many advantages of agent banking and are increasingly employing agents. That being said, agent banking differs widely in scope, structure and operations across geographies data.
This can affect the credibility of banks, a matter of concern to both banking institutions and their regulators. Hence, banks must take care to sign up the right agents, and regularly
monitor their performance.