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 infrastructure:
Banks have to fully staff branches, and empower staff to handle all normal queries. This means significant investment in training and orientation, whilst on the job training is used, it is used to back up orientation and refresher training, rather than a substitute for professional training.
ATMs
Clients need to draw more transactions away from banking halls. Banks have invested in ATM machines. To accommodate the growing volume of transactions and to manage ATM costs, banks started with branch based ATMs, but quickly moved to ATM banking halls based in key locations around Nairobi. 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.
Agency Banking
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