Bank Agency Business Plan

Bank Agency Business Plan

Bank Agency Business Plan Overview

This Bank Agency Business Plan takes a quick look at the banking agency business. This as represented by neighbourhood businesses offering services on behalf of banks and in return are paid by a commission. Such services include withdrawals, deposits, account opening, checking among others.

Banks started offering Bank Agency Business services in 2010 when the CBK issued the Kenya Guideline on Agent Banking. Whereas banks initially used Bank Agency Business services as a way of ‘branch expansion’ and reaching as many consumers as possible, nowadays agents banking is also about cutting the costs of the banks.

Banks want to push consumers away from banking halls which are more expensive to run than the Bank Agency Business. This means that banks want to have customers enjoy a similar if better or more convenient experience than they do in the banking halls. This has made banks invest in training
and monitoring of the bank agents.

Equity was the bank that fully embraced agency banking, and its success made several others coming running, playing catch up. Nowadays all major banks offer Bank Agency Business services or its equivalents like mobile and internet banking . Equity’s success in the Bank Agency Business is due to a number of factors which although not part of the content of this factsheet are worth mentioning. These include hands-on management of agents. Whereas some banks used agent management companies, Equity from the word go run agents from branches. This helped it closely monitor recruitment, training and even performance of the agents.

Something which could not be effectively achieved through a network management company, more so because the bank created a whole department for agency management. Equity also integrated mobile phones into their Bank Agency Business such that customers didn’t necessarily need ATMs to conduct transactions. This attracted many to the agents. And from the start Equity offered a wider variety of services through agents such as bank opening.

Other factors include aggressive marketing which created awareness among customers. If customers are not aware of the range of services they can get from agents they will not be interested in using the services. At the start Equity commissions were attractive compared to those of rivals. And although a number of banks have now developed equally efficient models.

Equity still maintains the lead in terms of number of Bank Agency Business. From our interviews the preferred banks for Bank Agency Business are Equity, Cooperative, Family and KCB. Preference is in terms of the number of customers they have, the demographics of the customers and the support in terms of marketing.

Download Bank Agency Business Plan / guide  here