An executive of global software company Amdocs believes that agent banking is the future of banking in the Philippines.
Amdocs vice president for mobile financial services Justin Ho defines agent banking as a network of banking agents serving as physical bank branches.
“With 60 percent of Philippines’ adult population still unbanked, especially in very remote unreachable rural areas, where banking services penetration is low due to lack of physical infrastructure, agent banking can help fill this gap,” Ho says in an email interview.
Ho, who helped establish and served as co-chief executive of Utiba Pte Ltd., a pioneer in the field of mobile commerce, before he joined Amdocs, is a strong advocate of financial inclusion and branchless banking. He holds a Bachelor’s degree in Mechanical Engineering from Melbourne University.
“Agent banking can aid traditional banking by adding another channel to it to make banking services accessible to unbanked people at a cost point that matches the banks potential revenue and profit targets for these segments,” he says.
Ho says setting up a network of banking agents can serve as a physical backbone and help banks and mobile financial services providers extend their reach in a cost effective and agile manner.
“With increasing mobile connectivity and smartphone usage, and innovation in financial technologies, agent banking can be used to deliver full-fledged banking services such as saving accounts loans, insurance products, personal finance management and others to this extended population,” he says.
“The ubiquity and agnostic nature of the mobile channel – is a perfect way to spread the benefit of agent banking to more Filipinos – anyone with a smartphone or even a simpler, USSD based phone can utilize the technology and also benefit from increased convenience and often lower fees. The lack of overhead [since a physical branch isn’t required] and lower variable costs involved also means that banks often waive fees normally associated with transactions for an agent’s customers,” he says.
Ho says telcos have recently led the recent development of mobile money products with great success. “This is a great opportunity for banks to act on the prospect to increase the proportion of digital or mobile customers in the region,” he says.
In agent banking, agents can assist with new customer on-boarding for the bank, thereby extending and accelerating the bank’s reach, he says. As agent banking technology advances, banks will be able to offer more services such as loans, mortgages and savings accounts – without having to invest in ‘bricks and mortar’ bank branch infrastructure, Ho says.
“These huge savings in time and money can be put towards developing additional agent banking technology and training, allowing agents to become financial advisors to the community,” he says.
Ho says Amdocs Mobile Financial Services agent banking solution can enhance any existing core banking system and evolve it into a branchless banking solution offering the full MFS spectrum of capabilities to overcome the “reach barrier”.
“It is a cloud based solution that can be easily deployed and managed. It provides the physical backbone of mobile money and simplifies cash services by digitizing and disbursing cash versus ATMs, banks, etc.” he says.
The solution is currently used to manage over 6 million MFS and telecom agents globally. It supports fast time-to-market and rapid on-boarding of agents so service providers can continuously evolve the end user’s mobile wallet experience into one that is much more robust and engaging, says Ho.