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Friday, 14 June 2013

Apex Bank to commence branchless banking soon

The ARB Apex Bank Limited is said to soon roll out an alternative form of banking to the conventional branch-based banking which allows financial institutions and other commercial actors to offer financial services outside the traditional bank premises with the acquisition of the Temenos Arc Mobile Platform.
This latest initiative, known as branchless banking (BB), is considered to represent a significantly cheaper alternative to the conventional branch-based banking, - and forms crucial part of the Bank’s primary responsibility to develop products for rural banks.

According to Mr. Kwadwo Aye Kusi, Managing Director, ARB Apex Bank Limited, ‘one of the primary impediments to providing financial services to the poor through branches and other bank – based delivery channels is the high costs inherent in these traditional banking methods.’

‘’The amount of money expended by financial service providers to serve their customers with small balances and conducting small transactions is too great to make such accounts viable. In addition, when financial service providers do not have branches that are close to the customer, the customer is less likely to use and transact with their service,” he further added. 

It is believed that, it’s in line with some of the aforementioned hurdles that this latest innovation in rural banking is being introduced.

The operation of the branchless banking (BB) would be made possible through the use of delivery channels like retail agents, mobile phones among others, and is believed can substantially be used to increase the financial services outreach to the un-banked communities.
This pronouncement was made during the 29th Annual General Meeting of shareholders of the Amenfiman Rural Bank at Wassa Akropong in the Western Region.

Speaking on risk management and internal controls, Mr. Aye Kusi once again noted the present competitiveness of the banking business and its associated risk and challenges. He observed that, to minimize the risk, there is the need for effective risk management at all levels of corporate governance, and urged boards of rural banks to institute such policies to identify, assess, monitor and control operational and credit risks among others.

He announced that, an ICT security policy will soon be instituted to ensure that risk associated with the implementation of ICT products are reduced to the minimum. Some experts are said to have been engaged already to begin work in Information Security for the RCB network.

He also reminded rural banks to strengthen their internal control mechanisms to ensure that adequate and effective measures are initiated to enhance standards and improve performance, for the attainment of their overall objectives.

The microfinance enterprise which has gained a lot of interest, particularly in some urban and rural communities in the country presently, has long been part of the numerous products of RCBs. However, this area of the finance and banking industry has witnessed a keen competition with the increasing establishment of microfinance firms all over in the country over the past decade.

Mr. Aye Kusi believes that RCBs can take more advantage of this enterprise by developing and creating a unique marketing niche to strengthen their microfinance businesses considering the vast potential of rural banks in this area. He therefore ‘sounded a wakeup call’ for RCBs to re-think microfinance given the proliferation of microfinance institutions all over, and promote it to sustain their operations.


The ARB Apex Bank with the assistance of DANIDA is also said to have instituted a merger fund to assist RCBs intending to merge with paid for consultancy services.  

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