Dependence on cash in cash out agents falling as more customers move to ATM and mobile banking: MSC Study
However, fewer Indians have stopped using these agents post Covid, compared to peers in Kenya, Bangladesh
- Oct 10, 2024,
- Updated Oct 10, 2024 11:12 AM IST
The dependence on cash in and cash out agents (CICO) has declined in several countries like Kenya, Bangladesh and India and several customers moved to other channels like ATMs and mobile banking, a new study has found.
As many as 48% of customers stopped using agent-based services, while 20% switched to other channels like ATMs and mobile apps in Bangladesh, Kenya and India, a multi-country research by MicroSave Consulting has revealed.
The survey, however, revealed that this trend was more dominant in Kenya and Bangladesh compared to India. While over half of the customers in Bangladesh (56%) and Kenya (51%) stopped using CICO agents, partly due to Covid-19 lockdowns, in India fewer customers (37%) have stopped using CICO agents post the pandemic.
In India, one of the main reasons why customers have stopped using CICO agents was due to limited access to agent points. India has around 2 million CICO agents, out of which about 33% are inactive.
CICO agents have significantly improved access to financial services in unserved and underserved areas, particularly for low-income households. In India, they have been a key driver of financial inclusion by taking banking services in rural and often remote areas.
“This highlights the essential financial needs of low-and-moderate-income (LMI) customers that assisted channels like CICO agents can meet. Negative feedback about the agent (64%) or the perceived risk of fraud and data leakage (46%) by the agent erodes customers’ trust in agents” said Akshat Pathak, Associate Partner, MSC.
Its previous studies revealed that many customers avoid agents due to concerns about data confidentiality within their communities, which undermines both trust and convenience.
Disrespectful agent behaviour (48%) and high service costs (40%) also contribute to poor customer experiences. “Research shows agents often charge unauthorised fees, particularly in Bangladesh and India, driving customers away,” it said, adding that in Kenya, the higher cost of using agents compared to ATMs and bank branches further discourages use of agents.
The study by MicroSave, which was conducted between March 2023 and August 2024, found that customers with a household income of less than $ 135 use agent services more frequently than those earning above that threshold. “This is likely because lower-income groups, often comprising less-educated daily wage labourers, rely more on agents for daily transactions,” said a statement.
Akhand Jyoti Tiwari, Partner, MSC elaborated that the study aimed to identify the key factors driving customer retention and attrition at agent points. “ We found that convenience and trust are crucial in promoting the use of such agents,” he said.
The dependence on cash in and cash out agents (CICO) has declined in several countries like Kenya, Bangladesh and India and several customers moved to other channels like ATMs and mobile banking, a new study has found.
As many as 48% of customers stopped using agent-based services, while 20% switched to other channels like ATMs and mobile apps in Bangladesh, Kenya and India, a multi-country research by MicroSave Consulting has revealed.
The survey, however, revealed that this trend was more dominant in Kenya and Bangladesh compared to India. While over half of the customers in Bangladesh (56%) and Kenya (51%) stopped using CICO agents, partly due to Covid-19 lockdowns, in India fewer customers (37%) have stopped using CICO agents post the pandemic.
In India, one of the main reasons why customers have stopped using CICO agents was due to limited access to agent points. India has around 2 million CICO agents, out of which about 33% are inactive.
CICO agents have significantly improved access to financial services in unserved and underserved areas, particularly for low-income households. In India, they have been a key driver of financial inclusion by taking banking services in rural and often remote areas.
“This highlights the essential financial needs of low-and-moderate-income (LMI) customers that assisted channels like CICO agents can meet. Negative feedback about the agent (64%) or the perceived risk of fraud and data leakage (46%) by the agent erodes customers’ trust in agents” said Akshat Pathak, Associate Partner, MSC.
Its previous studies revealed that many customers avoid agents due to concerns about data confidentiality within their communities, which undermines both trust and convenience.
Disrespectful agent behaviour (48%) and high service costs (40%) also contribute to poor customer experiences. “Research shows agents often charge unauthorised fees, particularly in Bangladesh and India, driving customers away,” it said, adding that in Kenya, the higher cost of using agents compared to ATMs and bank branches further discourages use of agents.
The study by MicroSave, which was conducted between March 2023 and August 2024, found that customers with a household income of less than $ 135 use agent services more frequently than those earning above that threshold. “This is likely because lower-income groups, often comprising less-educated daily wage labourers, rely more on agents for daily transactions,” said a statement.
Akhand Jyoti Tiwari, Partner, MSC elaborated that the study aimed to identify the key factors driving customer retention and attrition at agent points. “ We found that convenience and trust are crucial in promoting the use of such agents,” he said.