Over the past year, I’ve been paying close attention to how financial service providers (FSPs) are using technology to optimize their agent network models. Why? Because technology offers them an opportunity to make agent models more efficient and productive distribution channels. This isn’t a surprise.
The unfortunate reality, however, is that many agent networks still leave much to be desired. Long lines, cash shortages and manual processes are just a few encumbering problems.
In our recent report, Leveraging Technologies to Improve the Quality and Maximize the Productivity of Agent Models, Amin Khairy of the Institute of International Finance and I explain how institutions can benefit from technology solutions to optimize their agent models. We interviewed 23 representatives of financial institutions, fintechs, and other entities to explore the role of technological innovation in improving the quality and maximizing the productivity of agent networks. This the final report from our six-part series on how FSPs are innovating to reach the base of the pyramid, Mainstreaming Financial Inclusion: Best Practices, in partnership with MetLife Foundation.
The Storytelling Approach
I love conducting qualitative research, but I also got to explore a different approach in this report: storytelling. We decided to employ this approach to illustrate commonly cited challenges and bring to life the three main stakeholder groups in agent transactions: financial institution representatives, agents, and customers. Teresa, a senior manager at the fictitious Sahil Bank; Amar, a Mumbai shopkeeper eager to add Sahil’s agent banking services to his offerings; and Manisha, a seamstress looking to try out money transfers at an agent’s shop, are fictitious characters with vastly different backgrounds but a common interest in making agent networks work. The narratives we use to tell their stories are juxtaposed with real-world scenarios of how technological integration and innovation has served to improve and streamline processes within agent networks.
We chose to channel our creativity in order to highlight the dynamic role that humans have in contributing to the healthy functioning of FSPs in developing markets.
Take, for example, how several commercial banks in developed markets are experimenting with converting branches into consumer hangouts – for example, coffee shops – in response to the tremendous uptake of online banking. This new setup repositions tellers as bank ambassadors. We see them stepping out from behind the counter to directly engage with customers by leading money management sessions and other non-financial activities. In many markets, fintech platforms are obviating the need for traditional loan officers to do time-intensive calculations or assess the risk of prospective borrowers. Today’s loan officers now have increasing time to provide in-depth support to their customers.
Banks as “customer hangouts” positions tellers as bank ambassadors.
We also consider how the agent model will evolve over the long-term in light of the diminishing role of cash as a payment form and an increasing readiness of institutions to embrace digital transformation.
We hope you enjoy stepping into the shoes of our characters. And we hope, no matter if you’re a financial institution, researcher, or just someone with a general interest in agent networks and financial service operations, that you benefit from this report.