Ghana banks urged to embrace branchless banking concept

The Chief Executive of Ghana Interbank Payment and Settlement Systems, Mr Fred France, has urged banks to fully embrace the Branchless Bank concept in order to make their services more relevant to their customers while cutting back on cost.

He said, “In a fast pacing digital world, firms are increasingly using Information Technology (IT) to cut back on cost, improve efficiency and provide quick service to their customers.”

He said the use of IT in the banking sector globally was even more pronounced whereby banks were moving away from “brick and mortar” to “cards and clicks”.

Speaking on the subject in an interview with journalists, Mr France said the trend globally and particularly in advanced economies is the use of other methods other than bank branches to reach out to customers.

He noted that good customer care requires that the banks were able to reach out to their customers and literally deliver services to them at their door steps.

But he added that, it would be too expensive to open branches everywhere in order to be very close to each customer. Mr France explained that it was to get around this challenge that the Branchless Bank concept evolved.

According to him, branchless banking is the use of other distribution channels to serve customers besides a physical bank branch.

He said the use of Automated Teller Machines (ATMs) to provide basic banking services such as withdrawals, balance inquiry and lately cash deposits and money transfers was one common form of branchless banking.

He said the practice now was to install the ATMs in existing buildings such as malls and other easily accessible buildings rather than putting up a small structure to solely house the ATMs.

Mr France also mentioned internet banking and mobile phone banking as other forms to serve a customer without the physical presence of a branch outlet.

Another form of branchless banking that the CEO of GhIPSS talked about was the use of merchants or popular shops and super markets to provide basic banking services.

He said it was an emerging trend that should be embraced in Ghana. Mr. France noted that almost every community, residential or commercial, has a prominent shopping centre.

He said these shopping centres could be made to provide basic banking services and stated that it should be possible for people to go to their community super markets and be able to pick and fill account opening and loan application forms, check account balances, transfer and withdraw small amounts of money.

The GhIPSS boss explained that this would be possible with deployment of Point of Sales (POS) terminals. He said most of the POSes manufactured these days were able to perform several functions, adding that bank customers would be able to access a lot of services without the need to go to a banking hall.

“People are busy these days and the traffic situation is getting worse, so it makes sense to enable customers to access basic services within their localities” he emphasized.

Mr France said other outlets with nationwide reach such as post offices, and fuel stations could also be made to provide basic banking services.

Mr France, who is a former Head of Banking Supervision at the Bank of Ghana, however noted that some Central Bank regulations would be required.    He said the Bank of Ghana would need to come out with guidelines to regulate the use of shopping centres and other outlets for basic banking services. He said this was necessary to ensure that the system was not abused.

He said this would not be a challenge for the Central Bank because it is very much in tune with the trends and has the capacity to handle it.

The Chief Executive of GhIPSS said the benefits of operating the branchless bank concept were enormous that the Ghanaian banking sector must do all it could to explore it to the fullest.

“It is so difficult to even find a suitable place for a branch, come to talk about putting the structure in place and staffing it. These are costs that can be avoided”.

Mr France said the banking public would also greatly benefit from the branchless bank concept because they would be able to access basic banking services at their door steps.

“Many people board vehicles to banking halls just for basic services such as withdrawals and deposits or money transfers. It should be possible to access these services at the next shop with branchless banking”.

He also mentioned that shops and post offices providing such banking services would also see increased traffic of business activities apart from the commission that they would get for providing the services.

Mr France noted that the concept works best when the banking public uses payment cards such as the Visa, Master and e-zwich cards. He explained that with the wide use of cards, most merchants or shops would keep less cash.

Source: GNA