Agent Networks are crucial for Financial Inclusion in remote and rural areas, as they serve as an infrastructure for economic empowerment of the unbanked and underserved. So, selecting the right Agents is critical for building a successful and viable Agent Network.
This blogpost is based on the “Regional Policy Framework” by the African Financial Inclusion Policy Initiative (AfPI).
Why Agents are key elements for the success of Financial Services distribution
The type of customers in rural areas is different from urban centers, either is in terms of education, living conditions or financial needs.
For Banks and other Financial Service Providers (FSP) to onboard new customers from low-income and rural segments it’s important to find suitable Agents, that these communities will trust their income and life-long savings.
Agents are often valuable and trusted members of the community they serve.
Their role in handholding consumers can personally help customers to understand operations, assisting them with product info and helping to perform their first transactions. This leads to a better customer experience as customers feel safe when using new products as complex as Digital Financial Services (DFS).
Agents are brand ambassadors. They represent the institution’s identity and promote its values, create engagement, loyalty and brand awareness.
Selecting the best talent for the Alternative Delivery Channel (ADC)
A great product alone won’t be the recipe for success. FSPs must set up an Agent Network aligned with the business objectives and that respects all points established by regulatory authorities in order to serve consumers in a responsible manner.
In many countries, the Regulator influences Agent recruitment through guidelines for selection criteria. One of the main reasons for applying these requirements is to ensure that no section of the population is excluded. Diversity in Agent Networks promotes equal opportunities. A good example is the selection of women Agents, as they are enablers in women’s access to financial services, especially in markets where cultural constraints affect the interactions between women and men.
So, let’s move on to the points that must be considered in the selection and recruitment of Agents to build a top-performing Network.
Best practices for Agent Recruitment
1. Follow the Regulator’s guidance and recommendations
Regulators impose norms so that the Agent Networks contribute to goals set at the governmental level and national development.
It is therefore important to follow the Regulator’s guidelines for compliance purposes and to ensure that the Agent Network is sustainably aligned with the needs of the industry it serves. The guidance starts immediately from the selection criteria we described in points 2 and 3.
2. Confirm basic requirements and define Agent profile
Typically, the regulation defines who an Agent is and their role. The role depends on the type of Agent and other activity factors and, because of that, may include:
Customer registration, onboarding and handholding
Provision of financial and non-financial services
️ Helping customers with queries about DFSs
Customer awareness of DFS and responsible marketing
On top of that, Regulators lay out a list of basic requirements to become an agent, such as type of business/individual, age range, mandatory documents, experience or no criminal record.
Based on these basic requirements, FSPs must create the desired profile and complete it with their own selection criteria for the perfect fit in the business’ goals and values. Below, we point out the fundamental qualities to consider in the Agent’s evaluation:
Education level and capability for complex and more demanding roles
Reputation of the Agent in the community (since being trusted is a key factor)
Level of interest and enthusiasm about the product/service
Agent’s customer base fit to the FSP’s target (in case of super agents with employees)
Skills and coping mechanisms to manage liquidity efficiently
Location of outlets in strategic areas for future deployments (if the Agent owns several outlets)
Strategic alignment with the company’s goals
Business-growth mindset – will to invest in growing both businesses, FSP’s and his own
3.Ensure diversity in the Agent Network
While considering the qualities Agents must have, it’s recommended to design a diversification-sensitive selection.
The diversity in Agent profiles is a way to ensure that socio-cultural norms are not a barrier in the access to formal financial services. FSPs should encourage the selection of more women agents and rural agents. In addition, they must take steps to ensure that disadvantaged groups are not excluded, such as youth and aging sections of the population.
4. Implement a structure with hierarchies
The Agent Network must be organized by hierarchies. The hierarchical structure enables the coordination of responsibilities and operational actions of the Super Agents/Aggregators and Agents.
It also serves to clearly manage roles, indemnity and liability provisions between these and other stakeholders in the network.
5. Guarantee full responsibility of the Network activity
It is essential that FSPs assume full responsibility for the activities of their Agents. The FSPs’ accountability is especially important for the stability and reputation of this channel within the financial industry.
The risk may arise from bad practices by Agents that harm customers, such as fraud and other financial crimes. On the other hand, the security of the Agents is also at risk, as they work with cash and can be victims of theft and violence.
Thus, FSPs must be completely responsible for the actions of their Agents and also guarantee the safety of their activity.
6. Classify and organize Agents by tiers
Another significant aspect to take into consideration is the tiered and risked based requirements. It must be possible to classify and categorize agents in different tiers.
The requirements for becoming an agent should be risk and tiered based with the option to graduate from one tier to another as the Agent takes on more products and services. The tiers could be based on:
- Types of services provided
- Level of capital
- Volume and value of transactions
- Geographical outreach
Agents that offer similar services shall be subjected to the same regulatory requirements, regardless of their type.
Take the next step with Waynbo’s Agent Onboarding functionality
Selecting Agents carefully with a well-structured Agent recruitment strategy, can help financial institutions to reduce onboarding time and optimize resources. This contributes for a faster time to market.
As soon as the recruitment step is done, it’s time to onboard the Agent. Waynbo is the right software for your Agent Network from the beginning, with Agent Onboarding features.
Check the other topics of this 3-part blog post series about How to Build an Agent Network:
Read the second part: Agent Onboarding (Part 2/3)
Read the third part: Agent Network Monitoring and Supervision (Part 3/3)