Extending Delivery Channels – Driving Efficiency
Development of delivery channels that reach out to a large number of clients at an appropriate cost. Banks have managed this in multiple ways, firstly through increasing the efficiency of branch operations, secondly, through designing branches for volume operations, thirdly, through developing supportive infrastructure like ATMs, POS devices, mobile branches, fourthly, and more recently, through developing alternate channels, like full mobile phone banking and agency banking. The first two factors of increasing efficiency of branch operations and designing the branches to promote volume are considered below.
Designing efficient ...view middle of the document...
These ATM halls are designed to have one staff member, security, and up to ten ATMs operating at any one time, of which one or two ATMs could accept deposits. Equity quickly moved to a position where more than 70% of customer withdrawals were being made through ATMs.
Under agency banking guidelines published by the CBK in 2010, financial institutions are allowed, under strict conditions to operate agencies through third parties. This approach has been used in Brazil with great success, where shopkeepers operate bank accounts for millions of customers.
Mobile Phone Banking
Mobile Phone Banking is integrated into the M-Pesa menu or is accessible through Equity Bank’s own mobile banking service. Customers can deposit and withdraw money from their M-Banking account by transferring value to/from their M-Pesa account, which they can cash in or cash out from at any M-Pesa outlet, or through a link to a Bank’s account. Deposits onto M-Banking are free to the customer, whereas withdrawals incur Ksh.30 to Equity Bank plus the normal Ksh. 25 cash out fee payable to Safaricom. M-Pesa’s minimum and maximum transaction amounts (Ksh.100-140,000) apply.
Using Technology to Support Channel Development
The introduction of call centres, and the software to manage customer enquiries. Improving customer support mechanisms is a prerequisite for the development and expansion of channels, especially where channel development involve third parties acting on behalf of the bank.