The Chief Executive of Ghana Interbank Payment and Settlement Systems, 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. In a fast-paced digital world, firms are increasingly using Information Technology (IT) to cut back on cost, improve efficiency and provide quick service to their customers. The use of IT in the banking sector globally is even more pronounced, whereby banks are moving away from "brick and mortar" to "cards and clicks". Speaking on the subject in an interview, 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 banks are able to reach out to their customers and literally deliver services to them at their doorsteps. 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 - is one common form of branchless banking. He said the practice now is 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. He 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 is the use of merchants or popular shops and supermarkets in providing basic banking services, saying it is an emerging trend that should be embraced in Ghana. Mr. France noted that almost every community, be it residential or commercial, has a prominent shopping centre. He said these shopping centres can be made to provide basic banking services. He stated that it should be possible for people to go to their community supermarkets and be able to pick up and fill account opening and loan application forms, check account balances, transfer and withdraw small amounts of money. The GhIPSS boss explained that this will be possible with deployment of Point of Sales (POS) terminals. He said most of the POSs manufactured these days are able to perform several functions, adding that bank customers will 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 emphasised. Mr. France said other outlets with nationwide reach such as post-offices, and fuel-stations can 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 will be required. He said the Bank of Ghana will need to come out with guidelines to regulate the use of shopping centres and other outlets for basic banking services. He said this is necessary to ensure that the system is not abused. He said this will 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 is so enormous that the Ghanaian banking sector must do all it can to explore it to the full as it will save the banks the trouble of putting up branches all over in or banks' overheads. "It is so difficult to even find a suitable place for a branch, without thinking of putting the structure in place and staffing it. These are costs that can be avoided." He added that if the cost of the banks' operations comes down, it will reflect in their charges. Mr. France said the banking public will also greatly benefit from the branchless bank concept because they will be able to access basic banking services at their doorsteps. "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 will also see increased traffic of business activities -apart from the commission that they will 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 will keep less cash as people will be buying more using cards. He added that the shop owners will gladly give out the little cash that they have as cash-backs for those who want to withdraw money, so they will not have to keep huge sums of cash in their safes at the shops. Mr. France said many economies have adopted the concept and is working well for them. He acknowledged the move by banks in Ghana to use Internet and mobile phone banking as well as offsite ATMs to serve their customers and encouraged them to do more. He however noted that the banks will be driven to do more, if customers patronise the exiting branchless bank services. He said it is not exciting to banks when their customers fail to use ATMs or the Internet services, but choose to come to banking halls and form long queues. Mr. France therefore urged the public to avail themselves of changing trends so as to encourage banks to adopt more innovative ways to serve them better. Source: BFT