Agency banking is finally here and Equity Bank is quickly establishing its agency banking services in Uganda. Equity is able to roll out their network rapidly thanks to its intensive technical and operational preparations, thus being ready to move into the market immediately after receiving approval from the Central Bank of Uganda in November 2017. Julius Musiime, Head of Agency Banking at the bank, explains in an interview why Equity is so eager to get out there and what their strategy for success is.

“We see Agency Banking as a game changer. Equity Bank isn’t the biggest bank in Uganda. We don’t have the largest customer base, nor do we have the most branches countrywide, we do however have great experience with agency banking in Kenya. Agency Banking is our baby. It has to succeed.”

Therefore, since June 2017 Equity started warming the market, identifying potential agents and preparing all required documents, as well as training their staff. And as soon as they have been cleared by the Bank of Uganda, the first agents went live in early December 2017.

Equity approached established businesses, registered companies with enough cashflow to be their agents. These agents received detailed training in transactions processing, customer service and on how to originate signing up new customers with the phone app especially developed by the bank. A few minutes after a new client is registered, the bank staff in the back end reviews the application and this client receives electronic confirmation of their active bank account.

Despite the apparent simplicity of the front-end system, these first two pilot months unveiled plenty of glitches that needed to be fixed. The main issues were around the network; the connection of the system to the telco on which the platform runs. “The technology behind the system must be robust when you’re selling a technology-based service channel. We invested heavily in this technology and are now assured that everything is working the way it should.”

In order to onboard new customers, Equity Bank is also investing in marketing campaigns. Agent shops have been branded and clips are to be played on local radios. The team plans to use various tools such as road shows with trucks that ride into villages. There are special ‘customer’ days and branches have assigned Agency Champions who go out and promote the new service.

All the efforts put in by the bank in preparation seem to be bearing fruit. Since December 2017, over 14,000 new customers have signed up. “And we expect these numbers to grow. Agency banking will provide financial services to rural Ugandans at very low costs”, Julius explains.

Meeting the first agents

Together with Julius we visited 6 agency bankers, 5 of whom are women. Three agents are in the outskirts of Kampala, the three others are in rural Uganda. Listening to the stories of these agents it is clear that the new service is making banking easier and brings it closer to customers who would not normally set foot in a traditional bank branch.

One Equity Bank agent, close to a flower grower, says that employees used to receive cash payments because the nearest bank branch was over an hour away. Now the agent is right next to the greenhouses. Thanks to this, over 700 workers already opted to receive their pay on Equity accounts within the first month.

From our first observations, agents who actively take part – alongside the bank – in the marketing and communication efforts, will be the most successful. They truly understand the business and are willing to invest time and effort by going around their outlets and explaining how agency banking can impact for instance the lives of their neighbours, or of women selling tomatoes on the nearby market, who normally would not feel comfortable entering a bank branch.

We also visited a bank branch. The bank branches can also do more to spread the word about this new service, as there is not much information on agency banking within the banking hall. The branch manager explains he hopes that agency banking will shorten the endless queues. “Customers standing in line for hours to transact just a few thousand shillings. They can instead quickly deposit or withdraw at an agent”, explains Deus the Bank’s Branch Manager.

More awareness, more marketing, would also support agents in their current struggle to gain trust from customers. “People ask me, how do I know you are really working for the bank? How do I know this isn’t a scam? Only once they sign up and receive the confirmation SMS from the bank, that’s when they start to feel safe and comfortable with me as their agent”, explains Doreen. In the upcoming country wide media campaign will hopefully increase product awareness and trust, thus reassuring the customers that agency banking is here for good.

MM4P Digital Financial Specialist Ciprian Panturu guides banks to find an optimum approach: “The agency banking roll-out has to be done in line with the banks’ strategic goals. They should not roll out too slowly, as they need to reach critical scale for sustainable uptake. Nor too quickly, risking technical glitches that haven’t been ironed out yet or chancing inactive agents due to insufficient time to train and get them up to speed on the service. It is a very exciting space at the moment that we are monitoring closely.”