Agency banking and quality of service in the banking sector of Zimbabwe

Abstract

The study sought to establish the impact of agency banking on service quality in the banking sector of Zimbabwe, in particular the People’s Own Savings Bank of Zimbabwe (POSB). The study had five objectives. These included, determining the reliability of POSB’s agents in providing banking products and services, establishing the level of POSB’s bank agents’ responsiveness to customer needs, establishing the level of credibility in POSB’s agency banking services, determining the level of financial security and customer confidentiality in POSB’s agency banking services and establishing strategies that can be used by POSB to enhance service quality. The study employed a survey strategy and a descriptive research design. A questionnaire was the major instrument used to gather primary data, complemented by some personal interviews. The target population for the study included banking customers and branch managers. The research findings show that agency banking has negatively affected reliability, security and credibility service quality attributes. These findings resonate with findings of previous studies reviewed in the literature. On the other hand, the research findings show that agency banking has positively affected the responsiveness service quality attribute. Overall, we conclude that agency banking has adversely affected service quality for POSB. The study recommends a cocktail of strategies in order to ensure that bank agents deliver quality service. Some of the strategies recommended include frequent trainings for bank agents, penalties for non-compliance, revoking licences for non-performers, establishing an agency banking desk or a 24-hour contact centre, conducting customer satisfaction and mystery shopping surveys, among others. Furthermore, the study recommends that agency banks should provide agents with material support like cash and e-value to mitigate cash/e-money shortages being faced by bank agents. For example, POSB can offer an overdraft which agents can utilise so as to boost their e-values. Last but not least, POSB should ensure a seamless interface between its agents and the bank to ensure online and real time transactions. The study recommends future research to establish why the majority of Zimbabwean banks have not embraced agency banking despite documented benefits associated with it as well as the impact of agency banking on the profitability of the banking sector