Mobile Banking in India: Grass-Roots Marketing

This is part of a series of blog posts we are doing based on new research about business correspondents (agents) in India. The India research was one part of a three-country study (along with Brazil and Kenya).

A notable difference in the role of banking agents (also called Customer Service Providers or CSPs) in India compared to other countries is that the agents are responsible for customer acquisition in addition to processing transactions.

Our interviews with banking agents of FINO in Karnataka and Eko in Delhi revealed that unlike airtime, general provisions and other goods which sell themselves, agent banking is still a push-product in these early days in India requiring active sales and marketing efforts.

FINO’s agents are responsible for selling customers on the value of “no frills” accounts and insurance, although they are assisted by FINO through training and street plays.

In the case of Eko, their earlier strategy to let the agents market solely to walk-in customers had seen low uptake. Recent below-the-line marketing efforts such as hiring an independent marketing agency to open a canopy outside the agent’s store to explain the product and sign up new customers, targeted banners and posters with a message at the store, and street plays has seen a dramatic increase in the rate of customer enrollment from about 10 a month in Oct. 2009 to 140 per month (as of March 2010).

The onus of client enrollment resting on the agents has implications on the agent strategy: The agents need to be more knowledgeable about banking products and services compared to agents who focus on transactions. This may be done by choosing agents with higher financial literacy levels and additional training by the BC.

The incentives for the agents to acquire new customers have to be set up. They need to receive a sizable commission for account opening, which provides them with sufficient income during the early months, until they reach their target customer size when their income from transactions gets interesting enough.

However even this may not be enough. Eko’s agents would like to see mass media advertisements to increase awareness and credibility of the product. Addressing customers’ concerns through patient education, assurance that their money is safe and good service is important until the tipping point is reached.

-Karuna Krishnaswamy