Traditional Banking- Where We Were

Did either of your parents have to clear their schedule for the entire day because they had a bank appointment when you were growing up? And do you remember how long their appointment takes before they return home exhausted? Those were the good old days with stressful banking experiences that scared people and made them keep their money in their homes for easy access.

Aside from the typical problem associated with the Nigerian traditional banking system, there were other concerns, such as lack of trust due to fraud, high-security risks as a result of armed robbery that usually led to the loss of lives and money, and employee theft. In addition to these are limited access to banks, high costs of operation and maintenance, poor customer relations and satisfaction, and minimal products designed to meet customers’ needs. These were what defined where we used to be in the banking sphere.

Agency Banking – Where We Are

Imagine going to the bank to wait in a long line before you can cashin’ or cashout just like back then. You are already busy as it is and can’t be physically present in a commercial banking hall. So then what? You need some cash or want to send some, and you remember that you have someone trustworthy who can swiftly carry out your banking tasks for you. The person is nearby in a kiosk in front of your house or down the street. They help you when you need to make transactions or pay your bills.

Agency banking is a system whereby traditional banks, super agents, Mobile Money Operators, and other licensed financial institutions permissible under the regulatory framework to drive agency networks deploy a network of individuals to bring banking services closer to their consumers. These consumers are predominantly in rural areas where banking services are inaccessible. The individuals deployed are issued point-of-sale machines, also known as POS terminals. With this machine, they assist you in seamless banking transactions quickly.

Contributors and Contributions

The major key players are consumers, commercial banks like First Monnie by First Bank, Mobile Money Operators (MMO), Super Agents, and The Central Bank of Nigeria (CBN).

Consumers: In Nigeria, the undeniable truth: the customer is king has fueled the growth of agency banking. The constant demand for quick and accessible services propels agency banking forward. As major stakeholders in the industry, customers’ expectations continually push the boundaries, shaping agency banking into the convenient and efficient solution it is today.

Super Agents: They are the likes of Baxi, Itex, and Fet, among others, which are licenced category that works with MMOs and agent bankers to bring banking services nearer to consumers to achieve financial inclusion goals. Super agents are responsible for coordinating and monitoring sub-agents under them.

Commercial Banks: The quest to satisfy customers’ wants and take banking services closer to their customers moved commercial banks in Nigeria to drive agency banking by partnering with individuals, providing solutions, and investing in technology. They recruit and train agents, ensure regulatory compliance, and educate customers.

Fintech Firms: Various Fintech firms keep transforming Nigeria’s banking landscape with different innovative ideas. With the creation of digital payment tools like mobile wallets, financial transactions in Nigeria have been simplified through agency banking. Fintech solutions include data analytics to combat fraud and manage risks, biometric systems to ensure secure authentication, and educating customers, which promotes financial literacy.

Central Bank: As a principal actor, the Central Bank of Nigeria (CBN) has grown agency banking through regulatory frameworks and licensing. The set guidelines by the body are to ensure safety while promoting financial inclusion via initiatives like the National Financial Inclusion Strategy (NFIS). The CBN also Collaborates with stakeholders and fosters partnerships to extend financial services to underserved populations, promoting economic development and inclusion.

These stakeholders’ collaborative efforts have undoubtedly brought tremendous change to the industry. Additionally, with concerted efforts from Kashzoo, an agency banking platform designed with customers’ banking needs in mind, agency banking can only improve.

Benefits of Agency Banking:

Agency banking offers some benefits, including:

1. Expanded and Easy Access: Agency banking brings financial services to underserved or remote areas where traditional bank branches are not viable.
2. Convenience: Customers can perform basic banking transactions such as deposits, withdrawals, and transfers at local agent locations, saving time and effort.
3. Increased Efficiency: Agency banking streamlines operations by outsourcing certain banking functions to agents; as a result, banks focus on core services and improving efficiency.
4. Customer Satisfaction: The accessibility and convenience offered by agency banking lead to the overall customer experience, especially satisfaction and loyalty.
5. Risk Mitigation: By employing a distributed network of agents, banks can reduce the risk of fraud and theft associated with large cash transactions in traditional banking settings.

Kashzoo offers these and more benefits you can discover when using the platform.

Economic Impacts

Agency banking benefits not only the individual but also the economy of Nigeria. Here are some of them;

1. Financial Inclusion: By taking banking services to rural areas, agency banking promotes financial inclusion and economic empowerment.
2. Employment Creation: Individuals have been empowered through agency banking, reducing the country’s unemployment rate. Many others have gone ahead and become employers, also. Agency banking has become a way to generate additional income for the masses and contribute to economic development in their communities.
3. Reduced Costs: Banks can significantly reduce infrastructure costs associated with establishing brick-and-mortar branches using existing retail networks. The cost reduction allows commercial banks to offer services at lower fees and interest rates.
4. Financial Innovation: The rise of agency banking has surged financial innovations, particularly Fintech, in Nigeria. The Fintech firms develop solutions for seamless banking will continue to do so.

Future Risks

There are always risks attached to technological innovations such as this, a few of which are cyber security threats, fraudulent activities, and policy changes, among others.

Our Action

• The safety and security of your Kashzoo is our highest priority. To ensure that your accounts are safe, we have taken the following steps:

Requiring HTTPS on all pages and using HSTS to ensure browsers only connect to us over a secure connection. All passwords and transactional PIN data are stored in one-way encrypted formats to prevent decryption. Our users can enable time-based, one-time passwords for two-factor authentication on their accounts. We encrypted our database and all uploaded images. We employ additional encryption for sensitive data, like transactional PIN.

• We Conduct regular compliance audits and assessments to ensure compliance with regulatory requirements and industry standards. Our internal policies help proactively identify and address potential compliance gaps or vulnerabilities.
• Also, we provide comprehensive training programs for our agents on security protocols, fraud prevention measures, and compliance. These enhance their awareness and accountability in safeguarding banking operations.

Our Take

Agency banking has made remarkable strides. It has changed the banking sphere and simplified financial transactions for millions. With ongoing advancements at Phlex Payment and others, its journey is far from over.

If you’re looking for a more convenient way to carry out your banking transactions, then agency banking with Kashzoo is the way to go. With expanded access, convenience, reduced costs, and increased efficiency, Kashzoo offers a variety of benefits that make banking more manageable and accessible for everyone. So, if you’re ready to join the Kashzoo revolution, sign up today and start enjoying all the benefits of agency banking.