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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