Internet Banking Regulation in Angola: Branchless and Agent Banking
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Key Definitions
Branchless banking is a delivery mechanism that provides financial services outside conventional bank branches using agents, information, and communication technologies. Transformational branchless banking targets customers who cannot be served profitably with traditional branch-based financial services.
- Branchless Banking: The delivery of financial services outside conventional bank branches using agents and information and communications technologies.
- Transformational Branchless Banking: Financial services that extend to customers who would not be reached profitably with traditional branch-based financial services.
Best Practices and Issues
The Central Bank of Angola (BNA) should promote the orderly growth of the market by allowing banks, credit unions, and microfinance institutions to explore possibilities for additive expansion of banking services through branchless outlets and agents. However, there are several issues that need to be addressed:
- Consumer Protection: The insertion of retail agents between customers and the branchless banking institution raises concerns about who is legally responsible to the customer and the increased possibility of fraud.
- Transparency: The large number of parties involved in branchless banking requires transparency in fees and commissions.
Regulatory Risks and Benefits
The BNA should consider the following risks and benefits before regulating agent and mobile banking:
- Strategic Risk: The risk associated with making strategic decisions about branchless banking.
- Reputational Risk: The risk of damage to the reputation of financial institutions involved in branchless banking.
- Compliance Risk: The risk of non-compliance with regulatory requirements.
- Operational Risk: The risk of errors or failures in the delivery of branchless banking services.
- Exit Strategy Risk: The risk associated with exiting a branchless banking arrangement.
- Counterparty Risk: The risk associated with dealing with other parties involved in branchless banking.
- Contractual Risk: The risk associated with contractual obligations in branchless banking.
- Access (to Information) Risk: The risk of inadequate access to information in branchless banking.
Regulatory Approach
The BNA regulation promotes competition and innovation by prohibiting financial institutions from forcing exclusive arrangements with agents. Agents can play a role but need to be carefully selected, trained, and supervised.
Angola’s Context
Branchless banking is relevant to Angola due to its potential to increase access to financial services for the unbanked population. The BNA should promote the growth of the market by allowing banks and other institutions to explore possibilities for additive expansion of banking services through branchless outlets and agents.