Branchless banking

Branchless banking is recognised as one of the swiftest and – in many cases – most economically viable routes to extending access to financial services.  Whether using agent banking or mobile phone banking or a combination of channels, there remain a vast number of issues to resolve. How do you promote service provision without creating a monopoly or oligopoly? How can regulators enable innovation without endangering stability? And how do you ensure that customers aren’t being exploited – while allowing providers to make a profit?

For both economic and cultural reasons, branchless banking has become a focal point for increasing access to financial services. Not only does it reduce the cost and complexity of setting up a network of branches in remote areas, but it also offers a means of simplifying the services themselves from the user perspective.

The key to success is not solely innovation, but also integrity: for branchless banking to work, it must be transparent and trusted by the customer – whatever the model adopted. This requires a well thought-out regulatory regime that offers protection for customers and providers alike: the fierce debate about the relative merits of bank led against telco-led mobile money services revolves around issues of accessibility, security and customer protection. OPM has worked with regulators and policymakers in a number of countries to help them understand these challenges and to formulate effective evidence-based approaches to providing a safe, stable and inclusive approach to branchless banking.

OPM has developed a Branchless Banking Regulatory Database which provides in-depth information on the regulation of branchless banking within 10 countries and covers the ‘bank-based’ and ‘non-bank based’ models. We hope that we will be able to extend this database to more countries if there is interest in our doing so.

Try our branchless banking database to compare regulatory practice - Regulating Branchless Banking website