Agent Networks & Women Inclusion in Digital Financial ......Agent Networks in Bangladesh* 49% 27% 6%...
Transcript of Agent Networks & Women Inclusion in Digital Financial ......Agent Networks in Bangladesh* 49% 27% 6%...
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Agent Networks & Women Inclusion in Digital Financial Services: Case Study from Bangladesh
Akhand J Tiwari
September 28, 2016
Hotel Millennium
Jakarta
@akhandjtiwari
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Market-ledSolutionsfor financial
services
We are financial inclusionadvisory that offers practical,market-led solutions to financialinstitutions and corporationsfocussed on bringing value to thebase of the pyramid.
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‘The Agent Network Accelerator’ (ANA) Programme
40,000
Started in 2013, ANA is a four year research project in eleven major markets – Kenya, Tanzania, Uganda, Nigeria, India, Indonesia, Bangladesh and Pakistan. Expanded to Zambia, Senegal and Benin.
Designed to help the world’s leading providers overcome the cost and complexity of building sustainable cash-in/cash-out (CICO) networks across a broad geography
Structured to deliver cutting edge knowledge and global data on agent network management
Produces country reports, provider reports and powers the Helix curriculum
Over 30,000
completed
All baseline countries
completed. Wave 2 in
process
Data collected for leading providers
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Agenda
Talk about the a critical element of financial inclusion – the last mile connectivity – The Agents!
Look over over-the-counter transaction
Explore gender dynamics in DFS from supply side perspective
Conclude - Trends in DFS and way forward
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Healthy and working agent networks are important for financial inclusion
Distribution to the spectrum of segments
Complete the eco-system: cash-in/ cash-out
Frontline – the face of financial services
Use-cases Interfaces
Open APIs
Machine Intelligence
Security
Partnerships
Drawing Road-maps
Identifying segments
Use of Big-data
Outreach to last mile
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Agent Networks in Bangladesh*
49%27%
6%
7%5% 6%
Market Presence**
bKash
DBBL
mCash
UCash
MYCash
Others
A surge of Digital Financial Services (DFS) providers in Bangladesh has created world class, innovative agent deployment models.
Agent Network Typology
DFS ServicesOffered
Master Agent Model Hub and Spoke
Model Shared Agent Model
Third party specialist
Account registration
Basic product offerings**
International remittance
Merchant payments
* The data presented in this presentation is taken from ANA Bangladesh Wave II study conduced by Helix. Other data sources used are likewise referenced. **Defined by number of agents that serve a providers. An agent is counted for each provider it serves.
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Non-exclusivity of agent networks is good but has some risks to look-out for…
9% 11% 13%
56%
64% 66% 66%70%
0%
25%
50%
75%
100%
1
% A
ge
nts
Zambia'15 India'14 Kenya'14 Bangladesh'16 Uganda'15 Pakistan'14 Senegal'15 Tanzania'15
Less pressure on providers Customer's access to more than one
providers’ services at one outlet
Agents squeezing commissions out of providers and money from customers
Agent’s limited ability to handle business
13% of non-exclusive agents serve a median of 4 or more providers.
Non-Exclusivity: ANA Research Countries*
Providers and Agents
*ANA surveys were conducted in 2013 in Uganda, Kenya, and Tanzania; in 2014 in Bangladesh, Kenya, Pakistan, and India; in 2015 in Zambia, Tanzania, Uganda and Senegal; and in 2016 in Bangladesh.
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Providers will need to continuously look at barriers that prevent agents to conduct more transactions...
Lack of resources to buy enoughcash/e-money
Too many agents competing forbusiness
Individual clients' demand forservice is not very regular
Credit to agents to manage liquidity?
Agent Segmentation? Product sophistication?
Top Three Barriers To Conducting More Transactions in Bangladesh
Providers and Agents
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Effective agent management – better said than done…
Agent’s Knowledge
• 30% of agents know that there is a limit to
the amount of money users can keep in
their accounts
• One out of six agents know it is possible to
send e-money to those who do not have an
account
• Just over half of agents know who
regulates mobile money in Bangladesh.
Monitoring and Support
• The agents who receive these
monitoring visits conduct 5 more
transactions than those who do not
receive visits.
• Agents who receive induction training are
more likely to be complaint with respect
to collateral display at outlets.
Compliance
OTC transactions are prevalent – over three-fourths of agents offer money transfer services and 47% assist customers in performing transactions on their handsets
Providers and Agents
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What are OTC transactions
OTC Transactions
An OTC transaction is “a transaction that the agent conducts on behalf of a customer from either the customer’s or agent’s mobile money account.”
Source: CGAP, GSMA, MicroSave Analysis on OTC
Direct deposit by an agent into the wallet of an end user (e.g. Uganda, India)
From one agent to another with identification (e.g., Pakistan and Senegal, Zambia)
From one agent to another without identification (e.g. Bangladesh)
Agent assisted transaction! (everywhere)
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All type of users like to conduct OTC
OTC Transactions
Source: InterMedia 2016
While OTC is formalised in Pakistan and Senegal, it is not uncommon in other ANA research countries such as Uganda (78%) and Zambia (67%), where it may not be formalised.
73% of mobile money users prefer asking an agent to conduct a transaction on their behalf—i.e. OTC transactions.
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Why do customers like OTC?
OTC Transactions
Can get OTC done by an agent without having to register, while there are barriers to registering -
Complex KYC requirements
Lack of Use-Cases (customer value proposition) to use wallets
Complicated user-interfaces
Behavioural constraints – fear of technology, lack of trust in the system etc. – creates status quo bias
Agents’ motivation to conduct OTC
Providers’ motivation to initial growth
Regulations
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Provider and Regulator perspectives on OTC
OTC Transactions
Shall we make efforts to stop OTC transactions?
There are risks to • Customers • Providers • Regulators
But customers prefer a hassle free experience and some really need agent assistance
So OTCs are important but it needs to be done in a way that risks are mitigated and that product diversification continues
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Where are women agents?
Women in DFS
BANGLADESH ZAMBIA UGANDA INDIA SENEGAL
Male Female
0.4%
46%
67%
9%
35%
We know* Women customers prefer interacting with female agents, Women agents are believed to have more patience with the customers, and Women are considered to be more sincere, disciplined, accountable,
responsible, and honest.
*MicroSave study with women agents in India and Bangladesh
Why we see so few of them?
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Business landscape as perceived by women agents
Women in DFS
Societal Norms
Initial Working Capital
Agent Training
Risks
Liquidity Management
Agent support
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Watch out for –
Trends in DFS and Way Forward
Government policy
• Government goods – e.g. UPI, Financial inclusion policies
• Gender-inclusive financial services
• Regulatory environment• eKYC
User centric product design
• Expanded suit of financial products
• DFS++: value chain, water, energy
Marketing/agent training and customer communication
• Behavioural designs to agent training e.g. E-Paathsaala
• Financial capability through responsible product marketing
Technology
• Fin-Techs and Big-Data• Customer interfaces• Low cost smart phones/App-
environment• Interoperable payment
infrastructure