How to Build a Distributed Service Platform.
In our previous newsletter, we described the existing opportunities for you to scale up your business by making your services accessible to offline markets and now this will provide a guide as to how you can embark on this process.?
Even though #banks are expected to lead the #payment infrastructure, they are limited in their reach due to high operating costs, expensive legacy infrastructure, complex regulatory requirements, processing margins, and procedural fees. While #Telcos have a clear advantage in the payments industry because of their enormous client bases, extensive agent networks, and distinctive data. Here, I will share and recommend some opportunities for banks and telcos to expand their distribution channel.
Opportunities for banks?
1. Leverage your existing infrastructure: The offline payments sector, which is expected to continue to be the dominant channel for several years despite the rapid rise of internet payments, can be captured by banks by utilizing their current infrastructure and networks, including branches, ATMs, and agents. In a market where cash still accounts for more than 90% of all transactions, basic services like CICO will continue to be high-margin necessities.?
2. Deliver embedded finance: In order to significantly increase distribution and client access, banks can integrate loans and other products into customer journeys and third-party platforms. By creating and packaging new, flexible financial services that are integrated into customer journeys and third-party platforms, banks are well-positioned to increase access to third-party customers (including those without a bank account). This will expand the distribution channels and reach of these products beyond the bank's proprietary customer base and channels.?
3. Offer payments-as-a-service: Since #fintech and internet enterprises occasionally lack the regulatory clearance that banks have to offer a broad range of products and services, banks may reposition their capabilities, footprints, products, and services as an integrated growth platform and launchpad for a burgeoning ecosystem of innovators aiming to quickly develop and enhance their unit economics.?
Papersoft helps companies like yours deliver services through the Alternative distribution channel or field workforce. We provide you with the tools to scale your agent network into an agent-as-a-service platform.?
This allows you to integrate your services and products and leverage partnerships to accelerate effective distribution, generate new revenue streams, and obtain more insights about customer behaviour.?
Opportunities for Telcos?
1. Reposition proprietary distribution networks as market platforms: Bank's extensive agent networks could be transformed into bigger distribution platforms that expand and aggregate their offering by incorporating additional parties, such as banks and fintech. Agent networks have moved mostly from pure airtime sales agents to mobile-money agents. If you keep your important distribution networks closed off to competing parties, who are likely to develop alternative networks, they run the danger of losing out.?
2. Accelerate the pace of innovation: By accelerating digitization, increasing the user experience, and expanding their products, telecom companies may convert a larger portion of their inactive customer base into an active, transacting one at scale. Most #African businesses already use proprietary wallets with basic features like transfers and bill payments, which are designed to work primarily on older devices and offline channels. These will still be important, but they won't likely expand as quickly as online channels, better technology, and products that adapt to changes in consumer behavior.?
3. Monetize your data: Data could also be used to increase productivity and improve the customer experience, for instance by creating customized loyalty programs. Telecom data is now richer due to transactional data from mobile wallets, which can be used for a range of financial and other products as long as customers' authorization has been secured in accordance with privacy laws.
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