Branchless Banking Can Succeed With Effective Practices


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In most countries, especially in emerging markets, the focus of central banks is to provide banking services to unbanked banks. This has been a great convenience, especially for those customers who live in more rural areas. Moreover, today’s branchless technology has become far more economical and versatile.

For banks, this has the added benefit of reducing operating costs due to lower overhead costs. However, high operating costs were one of the main reasons for the establishment of a branchless banking system for the first time.

Nevertheless, certain issues need to be addressed to ensure the success of branchless banking solutions. So, in today’s article, we will discuss some effective ways to succeed in branchless banks. But before we begin, let’s take a look at an overview of branchless banking services.

Branchless Banking Solution:

Branchless banking means the provision of financial services outside conventional bank branches. This branchless banking solution frequently utilizes agents and relies on information and communications technologies to convey transaction details. Typically, POS (Point-of-Sale) terminals and mobile devices facilitate the provision of branchless banking solutions.

Using this mobile banking solution, customers can conduct financial transactions such as payments, remittances, withdrawals, deposits, and other utility bills. Customers can also conduct non-financial transactions, such as transactions’ statements, balance inquiries, and so on.

Effective Practices To Be Successful In Branchless Banks:

1. Fraud Prevention:

Fraud prevention remains an absolute priority for branchless banking and financial inclusion. This requires a robust identification process. There are many types of security protocols that typically allow this to happen.

Successful high-value transactions may require the incorporation of industrial-quality biometric scanners. For instance, specific fingerprints should be used to access remote terminals rather than PIN cards. Such supreme grade of biometric data can be used to prevent fraud, money laundering, and cybercrimes.

To access remotely via mobile devices, banks must utilize multi-factor authentication with different authentication actions such as answering security questions, entering codes to verify locations, and other queries that only account holders are aware of. From a software perspective, this multi-layered approach can reduce organization headaches and business fraud losses.

It is also crucial to empower and educate customers about fraudulent emails, phone calls and take immediate action if any unauthorized transactions are noticed in their accounts. This is how customers can avoid account breaches.

Banks using partners and agents for branchless banking platforms must also be monitored to ensure fair agent behavior and avoid risks identified by applications or accounts inappropriateness. In addition, banks are also required to use real-time monitoring to identify potentially fraudulent or high-risk behavior such as frequent remittances or high numbers of transactions.

2. Customer Service Efficiency:

The banking sector is service driven and customer service is a priority. But with a branchless bank, it is always hard to provide effective customer service. Therefore, it is critical to have a way for the client to be able to access the help on demand. Chatbots compatible with Artificial Intelligence (AI) for straightforward transactional support and general questions can address such solutions. However, for deeper support or complex transactions, the AI chatbot may provide the ability to connect to a live agent.

In addition, if any issues that can not be handled effectively with messaging, effective customer phone support plays a major role in assisting the customer. Sophisticated service delivery and seamless transfer requests are key to addressing those needs.

Smart branches will lead to higher efficiency and productivity while delivering a superior and consistent customer experience.

3. Leveraging technology to optimize customer decisions:

Greater competition and decreased customer satisfaction have made it more important for banks to deliver high-value services. Financial access is not enough; financial services must be responsive and utilized. So banks must ensure that customers are actually using their accounts. Increasingly using branchless banking services, banks are finding that effectively using cutting-edge technology and data analytics is the best way to meet customer needs and increase usage.

Thanks to the benefits of branchless banking technology, banks can target the right clients to optimize their long-term profitability. Once a customer opens their account, a bank can use predictive analysis and automate service delivery to evaluate its potential profitability, cross-sell loans, or other products.

With appropriate technology and data analytics, the branchless banking system can offer new loans to customers with adjusted offers based on how they used their previous loans. Therefore, with the proper technology, you can analyze your customers and prevent errors.

4. Secure Online Meeting:

When it comes to more complex transactions such as mortgages and other loan agreements, physical bank branches are typically used for in-person meetings. But, in a branchless model, these meetings may be held online, but protection from unauthorized listening is essential. Hence, a secure Internet connection with highly encrypted video conferencing would be necessary to prevent unauthorized parties from listening into the connection.

Branchless Banking Benefits:

  • Provide efficient and streamlined experiences.
  • Build digital customer paths through intelligent process-based orchestration.
  • Enhance the customization and value of digital client engagement.
  • Provide authentic human interactions.
  • Streamline processes and drive down delivery costs.
  • Expand convenience for customers.

Bottom Line:

Branchless banking continues to be a win-win for clients in urban and low-income rural communities. These services are available and delivered in a convenient manner. Also, these branchless banking systems are in constant use for further development to empower engaging online experiences for customers.

These branchless banking services will continue to evolve and provide solutions for the account & card management, transfers & payments, loan agreements, and finance management.

Nikunj Gundaniya
Nikunj Gundaniya, Product manager, one of the leading Digital wallet solutions, which provides mobile finance application development services. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.


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