Dvara Analysis Weblog | An Agent Success Framework

Creator:

This collection of weblog posts paperwork Dvara Analysis’s ongoing work on the position of enterprise correspondent (BC) networks in offering cash-in, cash-out companies throughout the size and breadth of India.   

Enterprise Correspondent (BC) brokers as devices of Money-In Money-Out (CICO) companies are a scalable and cost-effective approach of making certain quick access to primary banking companies. Nonetheless, suppliers have struggled to keep up and broaden these agent networks in distant areas because of low transaction volumes and insufficient incentives for his or her brokers. For shoppers to have trusted, dependable, and uninterrupted entry to CICO companies, the BC mannequin should allow profitable brokers with sustainable companies. 

There isn’t a single level of convergence on what it means for the BC mannequin to achieve success. It requires the involvement and satisfaction of a number of stakeholders (particular person brokers, agent community managers, banks, regulators, and so on.), which suggests that there are a number of views from which the success of the agent mannequin could also be outlined. These views may be complementary or conflicting in nature. As an illustration, rising the commissions obtained by brokers might quantity to a extra ‘profitable’ mannequin from the agent’s perspective, nevertheless it additionally creates greater prices for community managers who could then be unable to broaden networks into extra distant hamlets. Goel et al. (2022)[1] suggest a theoretical method to check the BC Mannequin as a by-product of the BPO Mannequin throughout six dimensions and defines agent success as the flexibility of the mannequin to realize its supposed strategic, financial, and technological advantages together with satisfaction of its quite a few stakeholders. The African Monetary Inclusion Coverage Initiative (2020)[2] suggests a regional coverage framework for Africa, highlighting key facets to be thought-about by regulators and DFS suppliers for environment friendly agent community administration. Consultative Group to Help the Poor’s (CGAP) Agent Administration Toolkit[3] acts as a technical information for helping community managers who wish to design and develop their agent community. Moreover, the Helix Institute of Digital Finance (2016)[4] has developed an analytical software to measure success throughout six dimensions of agent community administration. This contains community dimension, community distribution, community sustainability, service reliability, agent high quality and demographics. There’s, nonetheless, little concentrate on making certain the satisfaction and safety of the end-user of branchless banking services- the shopper. Since BC Brokers are the closest banking touchpoints for patrons in rural outposts, any hindrances confronted by them immediately have an effect on their means to service their clients. 

Due to this fact, we postulate that any sort of examination of the elements affecting profitable agent operations should not solely concentrate on capability constructing and threat administration for the agent, but in addition incorporate its related impression on the shopper. Constructing on current literature, we suggest a framework for evaluating agent success by means of a buyer safety lens; this could doubtlessly be deployed as a software to find out agent success whereas additionally permitting stakeholders to establish context-specific levers to enhance outcomes for the shopper.  

The Agent Success Framework may be understood as a consolidation of the next layers of the BC mannequin, the place every layer contains of things affecting agent success in addition to the shopper: 

Layer 1: Core Enterprise Mannequin 

The income and price construction of the BC mannequin, and the time to breakeven, identical to another enterprise, defines its profitability, and is usually the clincher in deciding continued operations of the agent. When brokers are unable to get better prices incurred throughout their enterprise simply by means of commissions, this might result in dormancy and attrition. In such circumstances, typically, they use this income stream to complement their extra essential livelihoods actions like working a grocery retailer, web café, cell recharge/restore store, and so on. Nonetheless, as a result of low quantity of transactions in distant rural pockets, brokers could then should resort to charging the shoppers immediately, in a bilaterally settled trend, which, whereas significant to their distinctive contexts, can be thought-about a transparent violation of RBI laws[5] for BCs. Different elements such because the absence of an appropriate insurance coverage cowl for cash-in-transit and the unavailability of credit score for recurring bills have an effect on the agent’s means to keep up ample money stock and repair their clients’ latent demand, thereby impacting their potential income stream. 

Layer 2: Community Administration 

The connection between the community supervisor and agent is outlined by the diploma of interplay between the 2 entities. In some circumstances, the brokers have a direct line with the supervisor for any queries that they elevate for themselves or on behalf of the shopper, which permits for quicker decision. The community supervisor additionally performs a vital position in supervision, monitoring, and coaching the agent on the suitable suite of companies to be provided to the shopper. Brokers sharing a detailed relationship with their supervisor usually tend to keep lively and higher geared up to deal with buyer requests. Furthermore, the supervisor might also help the agent within the technique of account rebalancing and float administration by providing money administration companies, which reduces situations of service denial because of inadequate liquidity.  

Layer 3: Regulatory Surroundings 

The regulatory setting contains all types of subsidies, credit score, and tax exemption schemes for the agent to higher run their enterprise. The regulator might also take it upon themselves to find out the worth of varied merchandise provided by the agent in addition to allow interoperability throughout platforms and suppliers. Unencumbered by regulatory inadequacies, the BC agent can operate easily and supply uninterrupted CICO companies to the shopper.  

Layer 4: Exterior Surroundings 

The final layer consists of a number of exterior elements that will impede the agent’s enterprise, leading to sub-optimal outcomes for the shopper. Technological failures resembling transaction failure and community downtime typically result in misery and negatively have an effect on the shopper’s belief within the agent. However, brokers could get discouraged from conducting high-value transactions and reaching out to new clients because of an absence of protecting mechanisms accessible in opposition to fraud dedicated by the shoppers (for example, utilizing faux foreign money for deposits and transfers, conducting illegitimate transactions by means of brokers and so forth). Lastly, the native financial setting of the area inside which the agent is working, together with competitors from different suppliers and in addition to brokers, could have an effect on their general means to conduct and proceed their enterprise operations. 

We plan to deploy the above Agent Success Mannequin to assist stakeholders resembling community managers, banks, and policymakers enhance the flexibility of their brokers to supply uninterrupted CICO companies. This diagnostic software could assist decide, ex-ante, whether or not an agent mannequin might function efficiently in a district or state as a result of adequacy of all 4 layers. It could even be used to establish, ex-post, the fault strains within the present agent mannequin, decide pathways for agent success, and enhance buyer outcomes.  

Click on right here to entry the Half I and Half II of the collection.

[1] Goel, Ok., Bandara, W. & Gable, G. (2022) Banking the Unbanked: Conceptualizing Success of the Enterprise Correspondent Mannequin. Inf Syst Entrance. Retrieved from https://doi.org/10.1007/s10796-022-10345-7 

[2] AfPI (2020). Regional Coverage Framework To Strengthen Agent Networks For Digital Monetary Providers. Retrieved from https://www.afi-global.org/wp-content/uploads/2020/12/AFI_AfPI_agent-networks_framework_AW3.pdf 

[3] CGAP (2011). Agent Administration Toolkit: Constructing a Viable Community of Branchless banking Brokers. Retrieved from https://documents1.worldbank.org/curated/en/898731468340143196/pdf/633350WP0Agent00Box0361513B0PUBLIC0.pdf 

[4] Helix Institute of Digital Finance (2016). Profitable Agent Networks. Retrieved from https://www.microsave.internet/wp-content/uploads/2017/02/New-Profitable-Agent-Networks-Remaining-Feb.-2017-2.pdf 

[5] Reserve Financial institution of India (2010). Monetary Inclusion by Extension of Banking Providers- Use of Enterprise Correspondents (BCs). Retrieved from https://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=6017 

Cite this weblog:

APA

Mukherjee, A. (2023). An Agent Success Framework- Half III :Arriving at an ‘Agent Success’ Framework. Retrieved from Dvara Analysis.

MLA

Mukherjee, Abhishek. “An Agent Success Framework- Half III :Arriving at an ‘Agent Success’ Framework.” 2023. Dvara Analysis.

Chicago

Mukherjee, Abhishek. 2023. “An Agent Success Framework- Half III :Arriving at an ‘Agent Success’ Framework.” Dvara Analysis.