Agent banking: 4 Key Benefits
Opening bank branches in rural areas are often not cost-effective. There needs to be an entire set up consisting of employees to help with services like loans, bill payments, depositing checks etc. Usually, the profit is less than the costs which harm the banks. This is where agent banking comes in the picture. The main purpose of agent banking is to provide financial services to people in places where banking services are still not expanded. Agent banking is a cost-effective way for traditional banks to extend their branches in rural areas. There are various benefits of agent banking and this article particularly explores them.
Increased Brand Visibility:
There is a whole untapped market of people not known to banks. Likewise, there is a large audience base unaware of banks and their services as there are no branches in the area. The closest is at least a 100 miles far which is not so convenient. In this case, agent banks help as they become the pathway of supplying bank services to the customers which raises brand awareness.
There is fixed cost allocated to every infrastructure. If the banks set up a branch in an area where the potential customer base is not large it can add to costs instead of profitability. However, in agent banking costs have to be paid only when the transaction is successful. This reduces costs and increases revenue saving banks from financial loss.
It is ideal for entrepreneurs who solely want to focus on their business instead of investing their time in trivial banking tasks. Agents provide OMNI channels through which banking services can be accessed anytime anywhere hence, making them able to run their business with 100% concentration.
Agents enable people in rural areas to avail banking services which build transaction records. The banks can use the transaction records to create financial opportunities to benefit customers and agents alike.
It can be deduced that agent banking has a lot of potential. It provides people in rural areas with an opportunity to avail modern banking services which enables them to improve their lives. The best thing is that there is more than one mode of transaction providing customers with a range of options to choose from according to their ease. Agent banking is a win for all three parties involved. To agents it provides them with an exclusive opportunity to sell bank services, to customers it enables them to avail better services and to banks it helps in expanding their market share.