Leveraging Technologies to Improve the Quality and Maximize the Productivity of Agent Models

Despite the growing volume of agents, the agent network model is rife with utilization and operational challenges. This brief examines the role of technological innovation as a potential driver for improving the quality and maximizing the productivity of agent models.

As a means of reaching underserved customers at low cost, financial institutions have designated authority and responsibility to banking agents to deliver financial products and services. Agent banking is a model for delivering financial services whereby an institution — be it a financial service provider or a mobile network operator — partners with a retail agent to extend services in remote or hard-to-reach areas.

Innovative financial institutions are streamlining and digitizing their processes, and utilizing real-time data and analytics to increase both the efficiency and effectiveness of agent networks.

Despite the growing volume of agents, the agent network model is rife with utilization and operational challenges. The good news is that technology offers financial institutions an opportunity to make agent models more efficient and productive for themselves and their customers. Based on in-depth interviews with industry experts and senior bank officers, and supplemented by a review of the literature, this brief examines the role of technological innovation as a potential driver for improving the quality and maximizing the productivity of agent models.

We found it useful to study this topic across two time-horizons: the short-and long-term; and from the perspectives of the main stakeholders in the agent network triad: the financial institution, the agent, and the customer. This structure allows us to account for two key trends: 1) the diminishing role of cash as a payment form, and 2) an increasing readiness of institutions to embrace digital transformation. It also allows us to explore commonly-cited challenges with agent networks through an illustrative, hypothetical narrative lens, giving voice to each stakeholder group. The narratives are accompanied by real-world examples of how technological integration and innovation has helped to improve and streamline processes within agent networks. Finally, we anticipate that in a future financial services ecosystem that is digital and cashless or cash-lite, we will see the role of the agent evolving from transaction processors to solution providers.

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This report is part of a two-year initiative, Mainstreaming Financial Inclusion: Best Practices, which aims to help advance efforts of financial institutions to reach customers at the base of the economic pyramid. This initiative and this report were made possible with support from MetLife Foundation, and in collaboration with the Institute of International Finance. The views and opinions expressed in this report are those of the authors and do not necessarily represent the views of the MetLife Foundation or the interviewees. All errors are our own.

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