The Strong Case For Agent Banking On Mobile

agent banking

Momentum has been building around the globe in adopting an agency banking model, spurred on in recent years by a raft of regulations providing banks with the necessary mandate to roll out agent banking services in markets as disparate as India, Nigeria, Bangladesh, Indonesia and Tanzania.  The attractions are manifold:  whereas mobile and online banking have seen a significant uptick in adoption, these existing services do not reach all customers, especially the financially disenfranchised, nor do they provide all services necessary to service customer needs.  So long as cash remains the dominant form for exchange and payments, electronic channels still require a physical locale for customers to make deposits and withdrawals.  Banks are have come to realize that agency banking dramatically increases the reachable customer base compared to brick-and-mortar bank branches, with significant cost-to-serve efficiencies.  Regulators are seeing agency banking as a powerful tool for accelerating financial inclusion.

Banking agents offer a cost-effective solution to the requirement for a physical place for customers to be served. Banking agents are typically retailers who provide banking services as an additional, profitable line of business, who are authorized to perform customer servicing tasks on behalf of a bank. Typically, agents are incentivized using a commission-based model (e.g., commission on deposits and withdrawals), matching the bank’s costs to customer activity while limiting fixed operational costs. This allows banks to rapidly and cost-effectively expand their reach.

Credit co-operatives and microfinance companies have already built up a successful track record of using agent models. One illustration of the power of agent banking is the implementation of Mistral Mobile solutions for Adarsh Credit Co-Operative in India.

The agent banking model

Adarsh Credit Co-Operative Society started its operations in 1999 as a co-operative society primarily serving farmers in Rajasthan, India. Adarsh is among India’s leading credit co-operative societies in terms of branch network, agent strength and deposit base.  It operates in 15 states through over 100,000 agents and 700+ branches.

Adarsh Credit provides saving products to cater to the needs of its members including: fixed deposits, recurring deposit and daily deposit products.  To provide services to its members Adarsh has created network of agents serve the customers at their door step. The agents travel throughout rural, semi-urban and urban areas to meet the customers and collect deposits. The rural environment creates travel challenges and agents are therefore not able to return to the office every day.

Challenges with current agent tools

Historically, the agents had two means of handling deposit collection:

1.    Carry a point-of-sale (POS) machine with them and input the deposit transactions in offline mode (given lack of communication channel). When they return to the office, they transfer the data from the POS to the core-banking system (CBS). Importantly, given the bulky POS machine, agents can be easily identified resulting in a risk of theft.
2.    Pen and paper. Agents write down the client information and deposit amount in a paper book. When they return to the office, the transaction details are entered manually into the bank’s systems. This approach has significant risk of error, data loss and data entry inefficiency.

Both approaches require the agents to return from the field daily to update the bank’s systems. For the banks customers, this creates a significant and worrisome delay before receiving an confirmation of deposit.

Leapfrogging to the future

To solve these problems and increase its efficiency, Adarsh has rolled-out a new mobile solution for their agents powered by Mistral Mobile. Now the agents use their mobile phones to take deposits, handle loans and provide payment & customer services.   Agents no longer need a POS machine and all the deposit-taking can be handled instantly while they are still with the customers. Even in rural areas without mobile data availability, the Mistral Mobile solution means transactions can be completed instantly and securely.

As a result, customer accounts always reflect the true deposit status. With the new Adarsh Credit mobile solution, agents collect cash from the customer and use the mobile application to enter the customer details. The mobile solution immediately processes the collection and updates the bank’s systems.  At the same time, the customer receives a notification SMS stating the new account balance. If the customer has any questions, the agent can also immediately submit those to the customer services helpdesk using the application.


The Mistral Mobile solution has enabled Adarsh Credit to realize cost savings and increase its operational efficiency:

1.    Online Everywhere: the majority of Adarsh agents work in semi-urban and rural areas where mobile data services are not regularly available. Even when data service is not available, the solution still completes the transaction. It enables Adarsh agents to collect and transact everywhere.
2.    Branch Operations Optimization: Transactions are posted online into the core banking system in real-time as the collection entry is made. It saves manual efforts required at the branch offices and results in savings in man power and infrastructure expense.
3.    Better Float Management: Previously there were long gaps between cash collection by the Adarsh agent and actual deposits into customer accounts at a Adarsh branch office. After enabling online field transactions with Mistral Mobile’s applications, Adarsh branch officers always know how much cash is carried by an Agent. This has allowed Adarsh to put improved controls on the amount of cash held to improve float management and reduce the risk of theft.
4.    Increased Customer Confidence: Money is deposited into the customer’s account at the same moment that the cash is collected and the customer is informed by SMS immediately thereafter. It provides security and confidence to the customers to do transactions with the Adarsh agents.
5.    Additional Financial Services: With the availability of an online mobile agent management platform, Adarsh is planning to expand its offering of financial services products to its members.

With their new mobile approach, Adarsh is leading the way to making financial services simple and accessible for their customers by empowering their agents through innovative mobile solutions.


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“Thinking Aloud” reflects the emerging trends and varied outlook of the rapidly evolving internet and communication sector. An IAMAI publication, this is a part of the market education initiative of the association.

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