Total Economic Impact study of Software Group’s Agency Banking Solution reveals 369% ROI in three years

Software Group’s Agency Banking Solution has been helping financial institutions achieve branchless banking expansion and provide access to financial services to underbanked or financially underserved remote regions for more than 12 years.

To measure its business value and direct financial impact for banks, Software Group (SoftwareGroup.com) commissioned Forrester Consulting to conduct an independent Total Economic Impact (TEI) study and explore the potential return on investment (ROI) enterprises may realise by deploying the Agency Banking Solution.

The study abides by strict frameworks to discover how an investment in the Agency Banking Solution pays off and what benefits it can offer to banks. Forrester’s multistep approach and framework included: 

• Due diligence;
• An interview with a decision-maker from an organisation using the Agency Banking Solution;
• A financial model framework; and
• A case study with a full overview of the total economic impact of purchase decisions.

The challenges of the studied organisation

To better understand the benefits, costs and risks associated with this investment, Forrester interviewed the decision-maker of an organisation who has experience using the Agency Banking Solution. The interviewee is a commercial bank in Africa that provides personal, commercial, inclusive and wholesale banking services. Prior to investing in Software Group’s Agency Banking Solution, the enterprise faced challenges with their previous system, like high transaction failure rates and difficulty in scaling agency operations due to the lack of automatic upgrades.

As a result, there were excessive expenses, limited opportunities and, ultimately, underserved remote regions in the country.

The interviewee required an innovative solution that could help them:

• Migrate customers and their accounts to the core banking system seamlessly;
• Improve the transaction success rate with its stable networks; and
• Implement system upgrades automatically and seamlessly.

Investing in Software Group’s Agency Banking Solution

Investing in the Agency Banking Solution allowed the decision-maker’s organisation to not only provide financial inclusion but to also enjoy fee revenues. The solution has helped strengthen agent networks, reach cost efficiencies and expand the existing customer base. This is achieved as a result of branchless operations via a network of local agents, eliminating the need to invest in more branches or ATM locations across remote regions. Agency Banking has proven to offer alternative scaling opportunities.

“With the solution, we can now expand on agent acquisition aggressively to acquire more customers from the financial inclusion segment. Currently, this segment has a customer base of over 1 000 000.” – Manager, Agency Banking

The findings

The results reveal significant revenue growth, cost efficiencies achieved by solving challenges related to customer onboarding and failed transactions, increased points of sale, enhanced brand reputation for financial inclusion and more.

Key highlights:

• Return on investment (ROI) of 369% and net present value of $2.04 million over three years;
• Increased fee revenue from a larger customer base amounting to $2 million;
• Cost efficiencies from reduced customer onboarding time totalling $575 700;
• Improvement in transaction success rates from 60% to 95%; and
• Payback period of eight months.

“Software Group’s Agency Banking Solution enabled us to better serve all our customer segments within comfortable proximity of their communities.” – Manager, Agency Banking.

Download the full study by Forrester Consulting to explore the potential returns of Software Group’s Agency Banking Solution in more detail and get an insight into the full financial model behind the business case.