Seven Lessons for Earning Customers’ Trust in Agency Banking
One of FINCA’s biggest challenges in using alternative delivery channels for customers is building trust. Customers accustomed to brick-and-mortar branches can be intimidated by digital technologies. Similarly, they may not be ready to accept and use banking agents. These are third-party businesses – such as pharmacies, gas stations, or grocery stores – that handle financial transactions on behalf of FINCA. In some markets, they are branded as “FINCA Express” locations.
To overcome mistrust and lack of confidence in banking agents, FINCA Tanzania employed a combination of high-touch and low-touch strategies. This taught us some important lessons:
Choose the technology carefully
Bank cards have drawbacks: they’re prone to damage and loss, and customers often forget their PINs. Instead of cards, FINCA Tanzania adopted biometric fingerprint-enabled point-of-service (POS) devices, using the slogan, “your bank on your thumb.” With this system, only a customer’s fingerprint enables access to their account. No one can withdraw money unless the owner is present to authorize the transaction. Choosing this technology helped build customers’ trust and confidence in the service.
Locate the first agents closest to branches
FINCA Tanzania placed its first agents just a few meters from a branch, which made it easy to refer customers. In some cases, FINCA staff walked with customers to the agent’s place of business. Even so, some customers remained hesitant, and FINCA had to make deliberate efforts to introduce customers to agents. We encouraged customers to visit the FINCA branch after transacting with an agent next door. This gave them an ease of mind knowing their funds were safely transferred. Once customers developed trust in the first agent, they began utilizing agents closer to their homes, businesses and communities.
Educate the customer continually
Customer education is a process. From account sign-up to first transaction to regular banking, customers were trained in multiple ways. FINCA Tanzania’s customer relationship officers met face-to-face with customers at routine village banking group meetings. They supplemented trainings with brochures written in the local language on the benefits of using a banking agent.
Employ SMS alerts
Short message service, or SMS alert services, inform customers of transaction activity on their accounts. Every time a customer makes a transaction, he or she receives a message indicating the transaction type and account balance. This practice helps reassure customers that no one can take advantage of their account without their knowing about it.
Ensure continuity of service
Network outages can erode trust, especially when customers are just getting used to a new channel. So FINCA adopted a “dual SIM” point-of-service (POS) machine that allowed automatic network switching. Whenever one network would fail, the “dual SIM” feature ensured that service was still available on the alternative SIM card. FINCA also selected agents carefully, choosing those committed to having sufficient liquidity on hand to serve customers at all times.
Automate agent monitoring
Channel business officers – whose job is to engage and support agents – began using a smartphone application to monitor agent activity. This application tracked liquidity, logbook use, terminal storage, float management and captured GPS to confirm when officers visited agents’ premises. FINCA analyzed this information to resolve any agent-level gaps that might negatively affect customer experience.
Hold regular agent forums
Every quarter, FINCA brought agents together to address customer service, performance, and to share feedback. These forums allowed FINCA to understand what was happening in the field, and act on agents’ suggestions.
In just three years of using these strategies, FINCA Tanzania expanded its agent network from zero to over 120 agents.
This growth allowed the subsidiary to move 57% of transactions to agents and growing, easing the load on our branches and reducing the cost of doing business.
Most important, we’ve earned customers’ trust and confidence and we shall continue to leverage this to deploy more innovative products and services that address our customer needs.