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Rethinking Agency Banking with New Innovations in Nigeria

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Emmanuel   Okoegwale

Few weeks ago, I attended a national financial services agency forum, organized by one of the leading industry players in Nigeria with very impressive attendance from agents, nationwide.

The venue was filled up with enthusiastic agents but with significantly eroded transactional abilities, due to operational challenges that is affecting their service delivery at the last mile and causing significant friction, with customers.

It was a complains galore for the agents as they churn out different negative experiences, disappointments linked to poor support arising from failed transactions, delayed and inadequate reconciliation processes, poor support from providers etc.

Agency banking is provisioning of basic financial services such as cash deposit, cash withdrawal, fund transfer, bills payment etc through third party agents within communities. They deploy their own resources like cash, outlets etc while the service provider, will provide items such as branding materials etc. Point of sale devices are provided by service providers and in some instances, paid for by the agents but recently, some providers are issuing them at no cost.

The agency network is the distribution network, front-end and customer facing entities which require significant resources to build, manage and cultivate.

Cost of building these networks can be significant for many operators if the overall strategy of the provider, is not well defined and it becomes more complex as they reach new geographies, requiring diverse implementation plans.

While the ultimate for service providers, is to unlock the customer value, by  enabling them convert cash to electronic value and use the services themselves but the agent as the middle-Man, wants to keep the customers locked into over-the-counter transactions so that, they can continuously, earn fees.

The agent has no compelling reason to educate the customer to acquire and learn how to use the wallet. It’s a loss for the agent whereas the Banks are banking on this front-end partner to provide that education and conversion. There might be value for the agents if the providers can rethink their commissioning strategy that gives the agent some long-term value for converting customers to wallet users with consideration for residual commissions strategies etc.

Shared Agency

Shared agency is visible at the front-end but disaggregated at the back-end with locked-in, float accounts. At the front end, the POS will accept any Bank card issued in Nigeria seamlessly but at the back end, the agent may have multiple agency agreements, so the agent keeps multiple float accounts with multiple providers which fragments His total e-float inventory and its, inefficient. The agent may need to keep switching transaction devices, re-balancing different float accounts, frequently.

Agents are Working, Blindly

From the various complaints of the agents at the event, it was evident that the agents had not been well equipped aside the almighty Point of sale device which most providers think as the ultimate, in setting up, equipping and activating agents.

Operational issues had to be reported through telephone or email to back-office, transaction reconciliation issues must back with POS prints-out which might have faded, missing etc.

Delayed resolution period to resolve agent transaction issues, leading to customer dissatisfaction and sometimes intervention by security personnel and sometimes, loss of agent funds.

A well-equipped agent will save the provider significant time and resources by using digital and innovative tools provided by the provider to manage day -to-day operations in an innovative manner, that adds value to the entire value chain.

The Agent Dashboard

Agency dashboard provides actionable transaction data, which is used to manage customer transaction outcomes, identify and isolate issues which will then increase efficiency and performance of the agents.

The dashboard will enable agents to have simple, intuitive and secure interaction with all their transactions channels like POS, Mobile money transaction data etc via a single interface. It provides critical operational functional that will enable the agent to transact effectively and securely which will then improve the customer trust and overall experience.

Some customers will never sign up for wallets services because of trust issues, they need someone they can hold accountable when things do not work and that is the agent, who should be well equipped to address operational challenges, adequately.

Benefits

The dashboard reduces the agent’s support cost with agents having visibilities on some transaction data via their dashboard and increase uptime and performance.

Agents will be able to report suspicious transaction timely for flagging by the service providers thereby reducing losses, arising from fraud etc.

It will help the providers to reach agents in a timely and efficient manner if there is a ‘run’ on the system.

Agents can deliver improved services which reduces agent and customer friction and improves the customer experiences.

It’s a major win for agents to be able to work more effectively and efficiently in stressful, street-level “Ojuelegba” environments.

Conclusion

For agent banking to prosper in Nigeria, forward thinking and innovative providers, can deliver innovative directions that can empower the agent network with effective tools (front and bank-end) that can drive Nigeria’s match into the digital financial services era.


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E-Financial

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

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Stanbic IBTC Bank PLC has disowned Tope Olajide, 22-year-old fraudster arraigned for theft of customers deposits.

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

The Bank said this in a statement on Wednesday.

The statement said: “The attention of the management of Stanbic IBTC Bank PLC has been drawn to news currently circulating in the media, about the alleged arraignment of staff of the Bank on charges bordering on the theft of customers deposits.

“The Bank would like to clarify that the defendant, a 22-year-old Tope Olajide, IS NOT, and was at no point in time an employee of Stanbic IBTC Bank PLC.

“The alleged culprit was apprehended around 7:30 am, on Thursday, 27 August 2020, by security operatives after he was exposed by CCTV footage using ATM cards he had allegedly stolen and converted, to make withdrawals from the accounts tied to the stolen ATMs.

“The CCTV footage also showed the alleged culprit pretending to assist customers at ATMs whilst also attempting to fraudulently dispossess the customers of their ATMs.

“He was subsequently arraigned before an Ikeja Magistrate Court on Monday, 14 September, for stealing the debit cards of two customers and using them to unlawfully withdraw the sum of N427,000.

“The Bank would also like to implore members of the public to be security conscious when conducting transactions at ATMs. Customers are advised to report any suspicious actions around them to security operatives who are usually stationed around the Bank’s ATMs, when carrying out transactions at any of our ATM locations.

“As an organisation, we hold dear the values of integrity, and we will continue to prioritise the safety of our customers effectively.”


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Buhari Okays Establishment of CBN-Led Infraco

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President Muhammadu  Buhari has approved the establishment of an   Infrastructure Company (Infraco) to be driven by the Central Bank of Nigeria (CBN) in partnership with the African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA).

Buhari Okays Establishment of CBN-Led Infraco

Mr. Godwin Emefiele, CBN governor

This is coming  on the heels of the foreign reserves’ slump to $36 billion following a cocktail of monetary policy interventions by the apex bank to cushion the scathing effects of the COVID-19 pandemic on the economy.

Mr Godwin Emefiele, CBN governor, made these disclosures in Abuja at the annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) with the theme: Facilitating a Sustainable Future: The role of Banking and Finance.

According to him, Infraco would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.

“This entity would also be able to raise funds from the capital markets and mobilise long term finance to address some of our infrastructure needs, while providing reasonable returns to investors. “We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.

“A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multiplier effect on growth by enabling the expansion of business activities in the country”, he explained.

On foreign reserves, Emefiele attributed its crash to the decline in foreign exchange earnings and subsequent adjustments in the value of the naira to the dollar.


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Amana Bank signs Comprehensive Software Deal with Path Solutions

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Amana Bank, a leading Islamic bank in Somalia has announced that it has selected iMAL, the AAOIFI-certified core banking platform from Path Solutions to replace its legacy IT system and deploy a single, cloud-based digital banking platform to underpin its banking operations.

This is Path Solutions’ third win in Somalia after Premier Bank and MyBank Ltd. The company went through a lengthy competitive bidding to which all international suppliers were invited, before being selected as Amana Bank’s preferred technology partner.

According to a statement following the signing, Path Solutions will supply and install its flagship Islamic core banking platform iMAL in addition to its comprehensive digital suite at Amana Bank Somalia. The new digital software will provide instant 24/7 service availability with fast, inexpensive, easy and convenient online banking, frictionless payments and transfers, personalization, engagement and retention.

Abdirizak Hussein Malin, Chairman of Amana Bank Somalia commented, “As part of our strategy, Amana Bank has instituted a digital transformation plan that will help us meet the emerging needs of our customers and the increasing demands of innovation.

“Consequently, we required a partner with open and agile technology that will drive powerful change. We have chosen Path Solutions for its ability to deliver vital digital financial solutions at this critical time with its depth of experience supporting Islamic banks in Africa.

“The company has differentiated itself from other vendors in its unique ability to combine core Islamic values with modern digital banking solutions, and to fully comply with Sharia and banking regulations.

“We are confident that the new technology, proven to significantly improve levels of customer fulfilment, will transform our operations by driving incredible efficiency gains while also reducing risk, lowering overall IT costs via higher automation and lower maintenance spending”.

The new iMAL platform leverages artificial intelligence and machine learning to help financial institutions get predictive insights for better data-driven decision making. It will also help strengthen customer loyalty through enhanced security transactions.

“We are delighted to partner with a leading Islamic bank in Somalia on a project that will set a new standard in digital banking for the country. Today, every financial institution has an incredible opportunity to apply advances in cloud computing to redefine every aspect of its business”, said Mohammed Kateeb, Path Solutions’ Group Chairman & CEO.

“Somalia’s Amana Bank is a good example of this transformation to drive innovation forward and ensure much more secure banking experience, enabling customers to enjoy the nuances of non-stop banking with cloud-based services.

The bank will also benefit from the full Islamic coverage which bridges the gap between modern customer requirements and intrinsic Islamic values. Our multi-award winning Islamic core banking platform will support the delivery of innovative digital products that are both Sharia-compliant and specialized for Amana Bank’s retail and corporate customers”.

The new agreement was signed by Amana Bank’s Chairman Abdirizak Hussein Malin and Path Solutions’ Group Chairman & CEO Mohammed Kateeb on Sunday 6 September at Path Solutions’ Dubai office. The implementation will be delivered 100% in the cloud and 100% remotely amidst the COVID-19 lockdown.


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