Library Videos Why Tech-based Banking cannot Replace Agents for Financial Inclusion?

Why Tech-based Banking cannot Replace Agents for Financial Inclusion?

18 Jun 2013 3850

Agents act as a vital link for the banks and financial institutions to reach out to the financially excluded segment.  But can they be replaced by technology? In this episode, MicroSave’s digital financial expert Mukesh Sadana reveals why the time is not right for technology enabled banking. In his own words, “Agents play a very crucial role of educating low income customers, many of them experiencing technology enabled banking for the first time. The customer segment these agents cater to, needs human interaction to trust the system and use it regularly, until the time that customers understand the whole gamut of front-end and back-end processes; can operate technology without help and until they have access to efficient customer service department. And that may not be possible in the immediate future, therefore, necessitating the strengthening of an efficient and cordial agent network for success of efforts towards financial inclusion.”

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  • JR

    Adebimpe Ogunleye, Organisation bowen Microfinance Bank Limited on 30/6/13

    Driving financial inclusion with technology can only compliment that of the Agents in the drive for financial inclusion of the rural economically active poor. However, with enlightenment and deep awareness just like when mobile money was introduced to include the rural poor technology will reduced the role of the Agents in the delivery of financial services over time. Thank you

  • JR

    Hugh Allen, VSL Associates on 28/6/13

    The love affair of the industry with mobile 'phones as a solution to reach the financially excluded misses a vital component. People who form into groups are far more likely to save than people who just have a mobile 'phone. The reason is simple. Membership in a savings group is part of a social contract that expects participants to keep their part of the savings bargain. In this context the mobile 'phone is simply a means by which savings can be made a low-cost proposition, but in the absence of the group, a mobile 'phone is only slightly more effective than a piggy-bank and hasn't yet proven to significantly ramp up per capita savings. Enthusiasts for mobile solutions tend also to discount the value of social and technical interaction that we have ceased to think is important in the west (indeed, often we see it as a nuisance) but remains highly prized in Africa and most of the poorer parts of the world. Maybe we should look at happiness indexes, see who the winners are, and cease to treat it as unimportant.

  • JR

    Carol, Accion on 27/6/13

    Good points in the video, indeed agents should not/can not be replaced by technology. However, the converse is true. It should be designed that the 2 compliment each other. We can not assume that people will not learn the technology nor assume that all systems will require 10-digit string UIs for transacting (several exist that already move beyond that). An optimal service includes designing the system whereby the agent is indeed an extension of the FSP AND the clients are educated to self-serve on some transactions. Very risky to put 100% reliance on the agents and this also would not embrace the phone penetration and learning capabilities that we are already seeing with BoP clients.

  • JR

    Agrippa Mugwagwa, FBC Bank Limited on 24/6/13

    I concur with Mukesh's observation, and the view couldnt be more accurate especially in emerging economies. The pace of roll out of new technology is way faster than the rate of adoption the market and in respect of mobile and mobile money technology agents need to play the education, awareness, motivation and support role until they are on their own. The emergence of young tech savvy users will also whittle the need for agents as these adopt and utilise the new technology faster. The need for agents will taper off as more tech savvy self-serving users emerge, payment platforms interoperate and virtualise supported by technology driven termination platforms for those needing encashment.

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