For agents to wholly endorse the e/m-banking proposition, to motivate them to recruit customers, and to maintain float and perform transactions – sufficiently incentivising agents is extremely important. This Note discusses the basics of incentivising e/m-banking agents. It also discusses the different types of incentives and experience across different e/m-banking deployments. Agents are the primary customer interface for the implementing banks/ANMs. The success of the ANM is largely dependent on the performance of the agent. Hence it becomes extremely important to sufficiently incentivise the agents. Apart from devising the right incentive model, it is also important to choose the right channel and frequency for the payment of commission that keeps the agents motivated to remain in the business and facilitate client transactions.
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Incentives for E/M-Banking Customers to Drive Usage
This Note looks at various ways of incentivising customers to increase the uptake and use of m-banking services. Since mobile banking services are new to most of the target clientele, it is important to devise incentive schemes which will encourage clients to try out these services and start using them regularly.
This Note also presents some popular incentive schemes offered to drive customer usage by mobile banking deployments across the world. Operators should measure the effectiveness of the incentive scheme periodically. The effectiveness can be measured on three dimensions:
1. The overall success of the scheme in terms of additional business volume and revenue generated;
2. Satisfaction of customers; and
3. Channel feedback and satisfaction
Driving Viability for Banks and BCs
“Business Correspondent (BC) model is quite often considered onerous by banks and is taken as a burden thrust on them by the regulator and policy makers. Low-income consumer segments, BCs as service providers, No Frills Accounts (NFAs) and bank’s portfolio of products are viewed in isolation of one-another and not as pieces of the same puzzle that, if put-together appropriately, can address the wide ranging financial needs of the low-income unbanked or under-banked.
This Note examines various enabling factors that can accelerate profitability for the banks and viability and sustainability for the BCs.”
Pricing for E/M-Banking
This Note discusses customer perceptions around some of the key pricing issues for banks while implementing agent-based banking:
– Pricing across different channels: how to price new channel relative to existing channels at par, or lower or at a premium?
– Flat or percentage based pricing: Percentage based pricing works out to be cheaper for small transactions, but do the customers choose on that basis?
Pricing is one the most important aspects for the success of a mobile banking initiative. In the mobile banking landscape there is no one successful pricing scheme. From discounted/free m-banking services to charging customers differently in different channels, pricing schemes can be very different.
Pricing Mobile Banking Services
This Note examines perceptions of transaction v. ledger fees and poor people’s willingness to pay for agent-based financial services delivered in their villages. It identifies a wide range of barriers for low income people to transact in traditional bank branches and provides evidence that they are indeed willing to pay reasonable fees for convenient service. Poor people recognise the benefits of agent-based banking but have concerns about agent-based systems that will also negatively affect willingness to pay. To cover the cost of paying agents, banks will either have to charge for deposits, or look to make money on other services delivered through their agents, including from remittances and payments selling insurance, and interest earned on loans. Pricing remains a challenge – but there are many opportunities!
Graduating SBI Tatkal Customers
Eko’s Tatkal remittance product was introduced at a time when Business Correspondent Network Managers (BCNMs) were struggling to gain visibility and trust among their target segments, as the No Frills Account (NFA) product alone was not sufficient to meet customers’ expressed needs. This is evident from the widespread inactivity/dormancy experienced for NFA accounts. Tatkal has given BCNMs an opportunity to gain visibility and improve the business case through increased volumes.
This Note discusses when and why customers may be ready to try new services beyond the entry Tatkal product and how BCNMs could leverage the increased footfall at their agents’ outlets due to Tatkal by cross-selling other financial products, to graduate customers to use a wider range of m-money services.