Agency banking is a retail banking in which contracted banking agents are allowed by their principal banks to process transactions on behalf of the bank.
The owner of the agent who is contracted by the bank avails the services agreed on the contract to the customer pool of the bank.
Banking agents could be supermarkets individual people’s lottery outlets plus other openings.
This form of revolutionary banking has unending benefits to the society which are well discussed below:
This form of banking broadens the revenue base of the bank since the bank services are taken closer to the clients door step where transaction are easily performed .On the same note this form of banking raises the competitive edge of the banking institution.
Agent banking providing a source of revenue to other business establishments that accepts to be contracted as agent bankers. Such agent bankers are paid specific percentage of commission for every transaction. Moreover this is a source of self employment for individual persons who accept to be contracted as agent bankers and there this is an initiative to reduce unemployment in the society.
Agent bankers are trained by their principal banks on the operation that are relevant for them to provide the services to the client and thus this provides an avenue for outsiders to understand the corporate governance of the institution as well as have a fine understanding of the operations of financial institutions.
AS its known to all the construction of banking premises requires huge sums of money however the agency banking requires a small room, a cubicle to be precise and thus very friendly to the cost saving objective of financial institutions therefore a shift to agency banking should not be an alternative but a priority by financial institutions and the individual persons. On the same note, little support equipments such as computers are less necessary for this kind of banking in fact it’s a new age of banking whose benefits largely surpass the cost of implementation and operation.
This form of bank has availed banking services to the rural lot who are largely limited to the HUGE banking facilities in the urban areas thus opening the rural areas to safer ways of handling cash as well as convenient way of receiving cash remittances from the towns.
It’s arguably correct that this form of banking is purely beneficial and ought to be supported by all due to its exclusive advantages.
Amelia, merwe. Banking in the new millennium. New Delhi. Juta and company limited,1999.
Punan, chuhan. Yes, Africa can: Success stories from a dynamic continent. Lagos. World bank publications, 2011.