Mansoor is a member of the Azimut marketing team and specializes in digital content. When he's not writing about self service, Mansoor spends his time brewing coffee or cycling.
In this blog:
- What are agents and agent networks?
- Why are they important?
- What is the future of agent networks?
Agent networks are becoming exceedingly essential to developing nations as they provide a means of simple cash in/cash out transactions without the need for bank accounts and bank branches. Agent networks are helping bridge the gap towards wider financial inclusion and purchase of more advanced financial products like bank accounts and loans.
However, the way these agents are set up is not sustainable and their success may be short-lived if they don't adapt to changing consumer needs and demands. The overall sentiment post-pandemic is that almost all consumers now expect self service options for service delivery and an omnichannel strategy heavily sways their purchase decisions.
What are Telecom Agents?
Telecom agents are independent sales representatives that help telecom service providers connect with customers who require their services. They earn commission from each sale they make and may be working for multiple carriers at one time.
These agents know their markets well and speak the local language. This can be very useful for new carriers trying to enter a market with a strong agent network. Working with agents is an easy way to capture a market as they drive local customer sentiments and can sway buying decisions.
Why Are They Important?
In developing regions like South Asia and Sub Saharan Africa, there are large networks of telecom agents that span across the nation with presence in both rural and urban areas. In a way, these agent networks connect the remote areas to urban cities financially. In the absence of ATMs and bank branches, agents serve as providers of financial services via mobile money platforms such as M-Pesa, MoMo and Orange Money.
Sub Saharan Africa was responsible for nearly 64% of the total value of mobile money transactions performed globally in 2020; that equates to nearly half a trillion US Dollars. Agent networks are singlehandedly increasing the financial inclusion rate in Africa by the hundreds of millions with over 500 million new mobile money accounts registered in the year 2020 alone.
These agents enable easy cash in, cash out transactions between cities and countries in Africa which means that laborers in urban cities can send money to their families and loved ones who may be in remote regions with no access to a bank.
Why Don't They Just Use an App?
Compared to North America where 88% people use the internet daily, only 19% of Africans have access to the internet and there are only 5 bank branches and 6 ATMs per 100,000 people. This means that for an individual to access financial services online by themselves is very difficult. People require assistance and this is where independent sales representatives a.k.a. agents come in.
Digital financial services through mobile money platforms have advanced significantly in Africa from simple CICO transactions to advanced financial products like insurance and credit rating systems.
This evolution of agents was fast tracked because of the involvement of a few banks and later the entrance of various fintech startups that revolutionized the mobile money industry in Africa.
For Africans, mobile money has provided a sense of security; they can receive and withdraw money from agents whenever they want and in case of emergency as well. They don't have to worry about physically transporting cash and no longer fear for its theft or loss. Mobile money platforms also promote saving by labelling accounts for different purposes such as expenses and savings. Research shows that this has been effective in female run households.
E-Commerce & Prosperity
Agent networks in Africa don't just promote financial inclusion, but more recently have been used to promote and increase e-commerce as well. It was only a matter of time until someone figured out how to leverage this vast network of sales reps to sell other products besides digital financial services. For example, Brimore is an African e-commerce platform that uses the agent network that helps local manufacturers and SMEs sell their products directly to consumers.
Mobile money is improving the quality of lives and standard of living in Africa either directly through increased access to DFS or indirectly by increasing tax collection resulting in more investment in infrastructure. There are studies that even claim a correlation between increased access to mobile money and a reduction in extreme poverty.
What's Next for Telecom Agents?
Agent networks in Africa are serving a very important purpose with millions relying on agents to safely handle and move around their money. At any given time, there are tens of billions of dollars in the African mobile money system which is why agents can't afford to many any mistakes. However, agents are only human and are bound to make errors which, in this line of work, can cause huge monetary losses.
For now, agents are reliable enough, but at the rate that mobile money customers are increasing, they may not be able to keep up. This is why the obvious next step for agent networks is partial digitization. We use the term partial because a machine will never be able to sell & network like a human. The digital element eliminates any chance of error or fraud so that agents can focus on the human element.
Digital Transformation with Self Service
There are self service kiosks that can automate all the standard services offered by telecom agents such as new SIM purchase, SIM swap, mobile wallet top up, mobile wallet withdrawal and so on. One such solution is SIMVEND, offered by Azimut. SIMVEND is a complete hardware and software solution that can help telecoms and agent networks digitize the provision of simple CICO services while retaining agents to sell the more advanced financial products.
The added advantage of self service digitization is the availability of services 24/7, cutting costs and also reducing operational complexities associated with issuing SIM cards and providing other related services.