Agency banking in kenya and indeed the world is not a new concept but it has been used in many countries especially in Asia and South America. when thinking of setting up agency banking strategy, there are some things that must be considered. These considerations have been listed below – especially when considering this concept in kenya
Central Bank Guidelinesfor Agency Banking in Kenya
The CBK Guidelines are available on the central bank website www.centralbank.go.ke. on agency banking in kenya. It’s crucial to analyze the Guidlelines in line with the Business Strategy a before a financial institution embarks on setting up Agent Banking. The things to look out for include the following;
- Permissible Agent Activities
- Agent Non Exclusivity
- Contractual Requirements between agents and financial institutions
- Technical requirements before engaging the agent banking solution vendors
Agency Banking in Kenya Agent Connectivity
The technology to use in connecting the agent Point Of Sale Terminals (Mobile or PDQ) to the core Banking system should be robust and able to process transactions on realtime basis.
Whatever technology you choose to use for Agency banking in kenya- the following are the things to look out for in addition to the mandatory technical features such as security.
- 98% uptime to ensure amazing customer experience as well as agent confidence
- An application with an array of services including and not limited to airtime purchase, pay bill money transfer, international remittances, purchase goods, school fees payments.
- Interoperability – the application should accept transactions from associations such as local switches and international switches, for example, Kenswitch, VISA and Mastercard
- Agent Management Portal for ease in reporting, operations and agent float and commission management.
Agency Banking in Kenya Branch Support
Agent Banking in kenya should be branch driven and branch centric. Inasmuch as many banks are viewing agency banking as an expansion channel, agent’s need to be linked to the nearest bank branches for operational and administrative effectiveness. Processes and Procedures should be put in place to ensure seamless operations and minimal turnaround time.
Branches should also particiapate in the agent recruitment process so that the Bank can leverage on market knowledge and existing relationships that branches have established with sorrounding businesses.
Agency Banking in Kenya Strategy
It’s imperative to take into consideration the fact that the size of the financial institution determines the approach that it takes. Small Banks may need to use agents and agency banking in kenya to grow their customer base (current and savings accounts) whereas Large Banks will focus on driving transaction volumes.
It’s also important to note that different markets have different banking needs. A successful agent banking business plan needs to provide the right product offerings for the different market segments. Agency Banking in Kenya has provided a new platform for kenyan banks to compete on which has been an advantage for customers.
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