Assignment Questions and Answers

Promote an Innovative Product and Service within the Organization you Work

Assignment Question on Promote an Innovative Product and Service within the Organization you Work

This week you are assigned to prepare an assignment that shows evidences of the understanding on how to promote innovation and creativity within an organization.

Describe a new product/service that it is promoted into the organization you work following the steps below:

  • How you promote your idea internally (e.g. meetings, presentation, providing information)
  • Is it easily acceptable by your employer/manager/colleagues
  • Try to convince them that this product/service will create a competitive advantage in the market
  • Refer to similar product/service that your competitors have
  • How the competitors’ product can be considered as a Threat to your new product/service
  • How much will the whole procedure cost to the business?
  • How the new product /service will influence the whole organization’s environment?
  • Conclusion

Note: Please use of scholar references and regular in-text citation in order to support your documents. Make sure you are familiar with the APA Referencing System.

Words: 3000 (10% +/-)

Assignment Answer on Promote an Innovative Product and Service within the Organization you Work

Introduction

Innovation and creativity are essential, and this study illustrates how they may be fostered within an organisation. The paper cites scholarly sources to back up its claims on how businesses may use innovation and creativity to stay ahead of the competition by implementing different communications strategies, management models for managing creativity and innovation, and organisational change-initiating instruments. According to research and regional research on innovation, the appraisal of product innovation is becoming an effective practice in businesses to gain a more significant edge and create wealth. Research on innovation has shown that evaluating product and service innovation is vital in firms to get a competitive edge and achieve growth in the market. There are, however, very few studies on the evaluation of innovative products in businesses, particularly those in the service sector, for their effectiveness and efficiency. Recent findings on innovative goods, their efficiency, and effectiveness in businesses, especially those involved in the banking industry, are sparse and confusing. There is a need to identify and suggest variables that drive the innovation process in businesses and their accompanying dimensions and metrics to evaluate efficacy and efficiency. So that it directly facilitates efficiency, business development, and financial results

Agency Banking Introduced

Due to contemporary technologies, third-party agents are now an essential element of the digital financial services sector. Many clients now choose to use agents because of their convenience, ease of access, and proximity to them. It’s a method used by financial organisations to increase the number of locations where customers may access their services (Alouch et al., 2018). They can provide banking services to their consumers via agency banking software, mobile devices with biometrics, and other technology. More than 200 million small and medium-sized enterprises (SMEs) globally do not access essential financial services. Financial literacy is poor, particularly in low-income communities, and many businesses fail to fulfil the public’s expectations in terms of proximity or convenience. There aren’t many branches, and ATMs are packed, making it challenging to go about (Njagi, 2016).

It is now possible for banks with banking agents to grow while keeping their costs down. Customers have a more pleasant shopping experience. Agency banking allows clients to conduct transactions and even pay bills without a formal ID, but rather biometrics. Financial services are increasingly being provided via banking agents. Because of the high connection and familiarity with local agents, agents are now more trusted than certain bank offices. After an extended usage period, customers now feel comfortable using these intermediaries for their financial transactions (Amatus & Alireza, 2018). In addition, agency banking has contributed to a decrease in the rate of grassroots unemployment. Due to technological advances and digitalisation, customers may now access new financial services and rapid responses to their financial demands via these banking agent networks through mobile devices.

 

Why Use Agency Banking?

Essential financial services are not readily available to more than 200 million MSMEs globally. Financial literacy is poor, particularly in low-income communities, and many businesses fail to fulfil the public’s expectations in terms of proximity or accessibility. There aren’t many locations where you can get cash, and the ATMs are already overcrowded. Ghassan and Fachin (2016) posit that the following are a few of the most critical advantages of bankers:

  1. It is now possible for banks with banking agents to grow while keeping their costs down.
  2. Customers have a more positive experience. Through the use of agency banking, clients are now able to conduct transactions and pay their bills at any time and from any location, using just their fingerprints and no formal ID. Financial services are increasingly being provided via banking agents.
  • Because of engagement and experience with local agents, agents have become more valued than certain bank offices. Customers now feel comfortable using these intermediaries for their monetary operations after an extended usage period.
  1. As a result, agency banking has also contributed to reducing the rate of grassroots unemployment.
  2. Due to technological advances and digitalisation, bank clients may access new financial services and rapid responses to their money demand through android platforms.

 

Cost of Agency Banking

For two reasons, we’ve found that agent monetary systems are two to 3 times less expensive to run than traditional branches. Because it uses already existing retail locations, agent banking cuts down on the amount of money financial institutions have to spend on building new infrastructure. Agent banking incurs higher operational costs from commissions to agents and connections, while the fixed costs per operation for branch offices are much higher. According to Ngari and Muiruri (2014) findings, an agent costs between 2% and 4% of a branches cashier. Even at the highest output, a branches cashier spends over 78 cents per transaction in fixed expenses, but a POS-enabled agent only spends 11 cents and a mobile-enabled agent or electronic payments spends 4 cents or less.

Mobile-enabled agents and payments have cheaper acquisition costs. Digital payments and bank account information connected to a mobile wallet may gain consumers for less than 70% of the value of a bank or POS-enabled agent by utilising cell devices instead of card payments. In specific locations, digital payments may also take advantage of the low KYC regulations, such as the absence of the need to supply photos and photocopies of documentation. According to the nations examined, agent service pricing models have expanded agent networks and broadened the availability of regulated financial products and services (Sahut, 2014). Agent networks in Nigeria would gain traction if regulators allow banks and their representatives to negotiate on a pricing scheme that is clear and compliant with state data protection laws to prevent unfair practices.

Facilities for agent operations put the channels closer to the customer stand to gain more income from interactions like person-to-person transfers and bank transactions. A customer’s accessibility may enhance their desire to pay for these solutions and boost the volume of transactions completed through this channel. Between 2008 and 2009, the amount of contributions sent by families using M-PESA quadrupled, according to recent research. Transactions are increasing rapidly because of the convenience and proximity of the devices. This is particularly essential for low-balance accounts since it is difficult for the provider to meet operating expenses independently and because the provider has to shift to a money transfer pricing structure for the account (Sanford, 2020). On a $50 account, a 6% financial margin equates to less than $3 in annual revenue. Mobile wallets that process 1.5 transactions monthly can continue to receive more than $7 a year from credit card payments and person-to-person transactions. Transaction processing accounts with small account balances and principal transactions benefit most from banking service systems’ reduced transaction costs and contract revenue model (instead of a float-driven model). More than seventy percent of the expenses associated with transactions via an agent rather than a branch may be saved for accounts that make two contributions and two monthly withdrawals (Mohamud & Warui, 2021). Like most mobile wallets, transaction-oriented accounts can make profits by offering facilities to customers (such as money transfers, bill payments, etc.). A transactional account can only be lucrative via a branch with a balance of over $200 (two deposits and two withdrawals monthly). In comparison, a transaction account with a balance of less than $75 may be lucrative via an agent channel (Asia, 2018).

 

Promoting Agency Banking

Banks face a unique issue regarding marketing because they don’t have any real things to sell. Customers must be convinced that a bank is trustworthy and getting the best value for their money to promote a bank. It is the responsibility of the bank to keep its customers and encourage future product purchases after they have invested. As a result of the rapid rise of agency banking in Africa, banks can add a powerful promotional strategy for this product into their plans. Our Market Insights for Innovation Design (MI4ID) technique was used in a half-decade study to explore attitudes, perceptions, and behaviours related to agency banking. Some of the people we spoke to were industry professionals and bank and MNO representatives in Nigeria and the surrounding territories. Investment in float, client education, and proactive liquidity management are ways banks may keep their agents engaged in the agency business. The following are ways we would promote agency banking:

 

Creating A Compelling Value Offer For Our Agents And Emphasising Their Earning Possibilities.

Banks must construct their agent value proposition to keep agents happy with revenues and committed to investing in float in MNO-dominated markets. This involves a thorough selection of items and commission structures depending on the projected demand for the agent’s products. Banks should focus on their business strategy, rewards, and earnings potential rather than the indirect benefits of agency to promote their value proposition. Since these transactions demand a more significant investment or rebalancing frequency, agents devote more time to completing them for the bank. Even though the median incomes of MNO and bank agents were equal in late 2014, bank agents are dissatisfied with their agency income because of low transaction volumes and considerable effort. Rethinking comparisons between transactions and agency income is critical for banks. Industry professionals and bank agent network managers widely lauded the reputational advantages of providing community banking services. As a result, when asked about the advantages of working as a bank agent, reputation was noted only by those who work as till operators (workers).

All in all, banks should build a compelling agent proposition and ensure that their pitches are truthful. In metro and peri-urban areas, they should emphasise the commercial rationale for being a bank agent rather than the intangible social benefits. For example, banks could present income statements to counter the unfavourable impressions of bank agency activity concerning MNO (Fong et al., 2014)

Provide high-quality services to guarantee a pleasant agent experience with the bank.

As a group, both agents and industry experts believe that bank agents are more knowledgeable than their MNO peers. Moreover, they are seen as having a particular connection with their client banks. Because of this, banks are required to give their agents high-quality services, such as in-depth specialised training, assistance in managing liquidity, and extra advantages like preferred credit lines. The training provided by banks was widely praised by the agents that participated in the research. However, their hopes for other types of assistance were unrealistically high. Bank employees, for example, complained about a shortage of credit options. Banks may not be using this opportunity effectively despite the possibility of creating agents’ credit histories from transactional data. When the demand for agent services is highest, agents complain about difficulties in controlling liquidity. To present, not all banks have specialised service counters. Waiting in line at the bank not only hurts agents’ side businesses, but it also disappoints them since they want their bank partner to be responsive. The least that a bank can do for its agents is to help them rebalance their portfolios. Banks need to be open and honest with their agents to improve agent satisfaction. For now, banks should provide specialised rebalancing counters, on-demand float delivery, and overdraft float facilities to help their agents’ liquidity management even if preferential access to credit is not practical (Garg et al., 2014).

 

Increase efficiency of agency operations through streamlining systems and streamlining procedures.

When dealing with customers becomes too much of a hassle, the agent goes dormant. Banks must provide optimal consistency and manageability by upgrading their systems. This includes making sure methods for reversing agent transactions and handling customer complaints are fast and easy. Agents in many banks are still experiencing system outages more than a decade after the first implementation of agency banking. Bank agents in Nigeria were more likely to face downtime regularly and longer durations than MNO agents. Prior warnings were much less common among these individuals, so their wealth was more likely to get trapped in the system. In addition, bank agents complain about lengthy transaction reversal processes that need many visits to the bank, substantial documentation, and multiple days to settle. Due to system unavailability or pending transaction reversals, larger quantities of money are “laid up” during wait periods. Their working capital is being squandered. Investing in float for a troublesome provider might be discouraged if there are recurring problems with unreliable systems or lengthy resolution procedures. Additionally, unfavourable word of mouth might deter both present and future customers of financial services from using them. System stability and fast complaint resolution mechanisms must be in place before a bank launches a new service. To minimise dissatisfaction, agents must be informed at first training if the regulator requires paperwork and delays.

 

Enhance Agent Services to Maximise Agency Investment.

Many agent banking models concentrate primarily on cash-in/cash-out services, but agents may be strategically utilised to offer other services that have previously been provided solely at branch locations. ” Value-added services agents provide include onboarding, remittance, bill payment and government cash distribution. Agents may be a virtual network for the cash-in/cash-out of social assistance now that many governments are beginning to provide it. Many of the most vulnerable and low-income communities dwell in rural regions with fewer official bank offices and ATMs. To strengthen their low-touch strategy, banking institutions might provide merchant services to agents who simultaneously act as merchants. To do this, retailers and agents may accept contactless NFC and QR code payments and digital choices for purchasing items. Agents might also do onboarding new clients to reduce the number of branch visits. OCR (Optical Character Recognition) technology may be utilised to speed up the onboarding process for new customers by eliminating the need for the agent to manually record pages of KYC data. OCR can automatically gather the most critical client information needed for onboarding using a phone camera (Carelle, 2015).

Additionally, financial institutions may want to explore dividing consumers into light-KYC and full-KYC segments. When the bank and client discuss over the phone or any other permitted method, they may complete full KYC. Complete client onboarding may be accomplished in this manner without the necessity for a bank visit from the consumer. The Agency Banking solution’s “light KYC” enables customers to transact up to a particular amount or volume of transactions, depending on their KYC settings.

 

Management and Guidance for Remote Agents

Agent managers have traditionally met face-to-face with their agent network to assist. Instead, supervisors and agents might communicate virtually using messengers and chatbots. Due to these digital technologies, customers will have a better experience, and the agent network will be more robust. It is also possible to minimise the cost of running an agent network by using digital communication channels like these.

Support for Rebalancing with Agent Overdraft Credit

There are instances when an agent must go to a bank, which is inconvenient and time-consuming at this time. Providers of agent overdraft facilities might assess the viability of lowering rebalancing frequency. An agent’s creditworthiness should be assessed using a scorecard that considers the agent’s transaction history. Keep the agents working during these periods of low customer activity, and they will become more loyal to the bank.

 

Agents’ Use of Low-Touch Authentication Mechanisms

One of the riskiest encounters in terms of physical exchanges is how a consumer uniquely identifies themselves to the agent. For example, many networks now have to think about how to maintain biometric devices clean and secure for various consumers. Low-touch identification solutions, rather than touch-heavy Pos machines and fingerprint scanners, might be prioritised to reduce this issue. OTP, tap-and-pay cards, and other low-touch payment methods may be started and validated by the consumer using their mobile wallet or mobile banking software (for example, cardless withdrawals). SMS receipts may also be used to facilitate purchases at agents even more low-touch, where rules allow.

 

New Agent Onboarding over the Internet

Low-touch solutions might also be helpful in the process of onboarding new employees. Potential agents may be supplied with a mobile app to begin the onboarding process on their own or help the financial institution representative, which reduces the amount of paperwork involved for both sides. It is then possible to pre-screen potential clients using the information provided by the agent. Once this process is complete, the agent may begin transacting. Training new agents may also be facilitated through digital channels or in-app instructional videos.

 

Using social distance and hygiene measures, ensure the safety of employees.

Banks must ensure that their agents are well-trained on any necessary social distance and hygiene procedures to keep their agent network secure. Once again, digital communication techniques may be used to do this entirely from a distance. With direct access to clients, agents have built trust with their communities. It’s common for them to educate consumers on financial service possibilities. Additionally, in the present COVID-19 situation, agents may assist disseminate any necessary actions that will help restrict the virus’s spread and keep everyone safe. Cash is still king in many emerging nations, and Agency Banking serves as a conduit for digital payments. Lower-touch agency banking will help sustain this customer-centric business and assist its development in the rapidly developing world of social distancing and financial technology delivery by thinking and acting ahead of time

 

Conclusion

Based on the estimates of many financial service providers, our research shows the cost advantages of agent transaction platforms over branches, particularly for accounts with a lot of transactions and low balances. In addition to POS-enabled agents, mobile-based agents and digital payments may extend the profitability threshold even further. However, there are still several variables that need to be considered.

As a result, I argue that banks cannot depend on agents to cross-sell financial goods. Because of this, banks may have to spend more money on marketing and employing sales staff, including branch workers, to cross-sell more financial products to agent clients. For example, a bank’s core financial system may be more sophisticated and costlier than a bank’s to the latter’s greater legislative compliance and more complicated processes and product offers. In a report, I assume that costs for transactions via agents are not greater than fees for transactions through standard banking channels. However, I predict that customers may be more inclined to pay for close-by transaction services due to the advantages of proximity.

As much as agency banking has and continues to play an essential role in increasing financial inclusion and deepening in the countries where it has been implemented, the model is nevertheless beset by several obstacles that, if not addressed, might reverse the advances gained. To reap the full advantages of agency banking, banks must first solve the obstacles it presents. To avoid underselling the parent bank, it is essential to pay particular attention to the quality of services provided by agents. Banks that want to improve their competitiveness might also benefit from this concept. As a result, banks have extended their customer base while simultaneously increasing the number of services they can provide each customer. The financial and cost advantages of the concept are substantial. As a result, the bank doesn’t pay the agents’ fees. It also improves the brand’s impression by more customers, particularly if the mother bank is in charge of the quality of services provided by the agent. The implementation of this intervention has proven a challenge, though.

 

References

Aluoch, K. O.,Odondo, A &Ndede, C. O (2018).Effect Of Alternative Financial Delivery Channels On Performance Of Commercial Banks: A Survey Of Commercial Banks In Kisumu City, Kenya. International Journal of Economics, Commerce and Management United Kingdom Vol. VI, Issue 8, August 2018

Amatus, H., andAlireza, N. (2015).Financial inclusion and financial stability in Sub-Sahara Africa (SSA). International journal of social sciences

Asia, N. M. (2015). Electronic Banking and Financial Performance of Commercial Banks in Rwanda: A Case Study of Bank of Kigali. MBA project. Nairobi: JKUAT

Carelle, K. (2016). Factors affecting the financial performance of commercial banks listed on the Nairobi Securities Exchange. USIU. Masters project

Fong, S., Ramayah, T. & Lo, M. (2014). New Product Development and Performance in the Banking Industry. Asia-Pacific Journal of Management Research and Innovation, 10, (4), 305–321

Garg, R., Rahman, Z., & Qureshi, M. N. (2014). Measuring Customer Experience in Banks. Scale Development and Validation, 9(1), 87-17.

Ghassan, H. B., andFachin, S. (2016). Time series analysis of financial stability of banks: Evidence from Saudi Arabia. Review of Financial Economics, 31, 3-17.

Mohamud, H., & Warui, F. (2021). Innovative Banking Practices and Financial Performance of Commercial Banks in Kenya. International Journal of Current Aspects in Finance, Banking and Accounting3(1), 41-53. https://doi.org/10.35942/ijcfa.v3i1.180

Ngari, J. M. K., andMuiruri, J. K. (2014).Effects of financial innovations on the financial performance of commercial banks in Kenya.

Njagi, P. W. (2016). The relationship between corporate governance practices and the financial performance of top 100 small and medium enterprises in kenya.

]Sahut, J. M. (2014). E-business models for financial services and internet banks. E-Commerce, E-Business and E-Service, 1, 13.

Sanford, C. (2020). Do agents improve financial inclusion? Evidence from a national survey in Brazil. Bankable Frontier Associates, Cambridge, MA.

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