In this case, the financial institution typically occupies a small area inside the retail store, equipped with a communications device to link to the mother bank and staffed by a bank employee. There is little relationship between the bank and the retailer, as each party carries out business as usual. | PARTNERS AT THE LAST MILE: RETAILERS, BANKING AGENTS, AND INSURANCE COMPANIES Summary of the Last Lecture The Last Mile Banking Correspondents Models of Bank-Retailer Relationships In-Store Banking In this case, the financial institution typically occupies a small area inside the retail store, equipped with a communications device to link to the mother bank and staffed by a bank employee. There is little relationship between the bank and the retailer, as each party carries out business as usual. In-Store Banking In Bolivia, for example, BCP, a large Peruvian bank, has set up small kiosks on the premises of various large retailers, usually supermarkets, to offer basic account services. In-Store Banking A financial institution may or may not pay retailers to occupy the space. In Uruguay, banks do not pay, claiming that the retailers benefit from the bank’s presence in the form of greater customer traffic, but in other countries— In-Store Banking Especially countries like Bolivia, . | PARTNERS AT THE LAST MILE: RETAILERS, BANKING AGENTS, AND INSURANCE COMPANIES Summary of the Last Lecture The Last Mile Banking Correspondents Models of Bank-Retailer Relationships In-Store Banking In this case, the financial institution typically occupies a small area inside the retail store, equipped with a communications device to link to the mother bank and staffed by a bank employee. There is little relationship between the bank and the retailer, as each party carries out business as usual. In-Store Banking In Bolivia, for example, BCP, a large Peruvian bank, has set up small kiosks on the premises of various large retailers, usually supermarkets, to offer basic account services. In-Store Banking A financial institution may or may not pay retailers to occupy the space. In Uruguay, banks do not pay, claiming that the retailers benefit from the bank’s presence in the form of greater customer traffic, but in other countries— In-Store Banking Especially countries like Bolivia, where only exclusive (one bank, one retailer) arrangements are permitted—the retailer has more negotiating power, and the bank does, in fact, pay a commission. In-Store Banking Such partnerships are relatively straightforward. They bring down the physical infrastructure cost of reducing “white space” on the map. In-Store Banking However, there are no cost advantages in terms of IT or staffing, since the bank’s own staff still processes transactions. In-Store Banking The attractiveness of this model depends on the relative cost of opening traditional branches, which is partly determined by the regulatory framework. Banking Agents In the banking correspondents or agent model, the financial institution works through the retailer, leveraging the retailer’s employees. Banking Agents Customers carry out banking transactions directly with the retailers’ employees at the cash register, and a shared information-technology system processes the transactions. Banking Agents Risk to the banking .
