Customer Adoption
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Potential agent network clients in developing countries either have never had access to financial services or only used branches to access their accounts. In Brazil for example, the 95,000 point strong agent network covers each municipality of the country, but the network is almost exclusively used only for bill payments. “Users” have not yet transitioned in full banking “customers” who also save money through this new channel. Thus, providers have to allay clients’ concerns that their transactions at the agent might be less secure than at the branch, as well as educate clients around financial product use, its terms and prices.
There is a general trust infrastructure between the bank and the client which can be created by recording transactions electronically, appropriate authentication, real-time transaction settlement, and receipt generation, i.e., an adequate technology set up.
In addition, there are a few other important elements:
Basic financial education. The entire technology-based trust mechanism outlined above breaks down if bank customers cannot be assumed to bear personal responsibility on two key aspects: the necessity of not sharing their bank card and keeping their PINs secret, and checking the POS-issued receipt before leaving the store to ensure its accuracy.
Transparency and disclosure. The customer should know about the respective responsibilities of the agent and the bank; the financial services that can and cannot be performed by the agent; the commissions costs per transaction, and whether these are payable in cash to the agent or are directly charged by the bank; and the process for initiating a complaint or claim.
A complaints capture and claims redress mechanism. Customers who believe the process has not worked fairly for them should be able to request clarification, complain, or otherwise seek redress.
Adequate internal controls. The bank should maintain a record of incidents reported at each agent, with a view to identifying suspicious patterns and monitoring service quality from the complaints. It should maintain a blacklist of agents it has terminated, which it could share with other banks and the authorities.
Especially for institutions targeting a new client segment, it will be vital to develop client-responsive products and service, and tailored marketing messages. Market research to understand client’s socio demographic profile, their income and expenditures, their existing use of formal and informal financial services, as well as their perceptions of financial institutions helps financial institutions to adapt their service offer and improve customer take up and continued use.
For example, many low-income clients are highly price-sensitive and prefer to pay per use, rather than incurring monthly account fees.
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