Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

What China’s fintech giants can teach Southeast Asia about banking on agents

Since their target customers generally have minimal banking experience, fintech firms tend to use agents to recruit them. Although the use of agents increases efficiency, concerns remain about data privacy and compliance with regulations
I refer to the article, “How to bring Indonesia’s great unbanked masses into the fold of financial inclusion” (January 5), where agent banking was proposed as a “creative, hi-tech” method to address financial inclusion of the unbanked population in Indonesia.

With all due respect, I would like to share some observations, drawn from China’s experience, to urge caution.

While the rise of fintech or financial technology has offered more convenient and cost-effective banking services, it is predicated on one assumption – that people fully comprehend and trust banking services offered online.

Sadly, this is not the case for the unbanked/underbanked population with minimal experience with banking services, which have been deprioritised by traditional financial institutions. Therefore, human intermediaries become their stepping stone to innovative banking services.

For example, one such intermediary in China hosts a three-tiered network of individual agents targeting customers in less-competitive “below Tier 3” cities, and rural areas. Their agents reach out to and help consumers apply for consumer loans provided by online lenders whose credit decisions are driven by data without any paperwork.

Some big tech firms also opt to use agents. For instance, the fintech arms of China’s biggest internet giants have cooperated with telecom operators to provide instalment loans to customers purchasing cellphones at their stores, with in-store agents facilitating the loan application process.

The agent banking model is no different in nature to the agent insurance model which has been in place for centuries, with the aim of reducing the information gap and promoting trust between institutions and customers. However, some specific concerns exist for the agent-banking model.

First, data privacy: agents would inevitably have access to sensitive client information while interacting with customers. Though there might be penalties imposed in case of data breaches, agents are either less capable of safeguarding client information or even willing to leverage the information on hand to promote other services, for which they can earn commission. In either case, the risk is borne by the financial service provider, since the customers involved would ultimately become their clients.

Second, control and compliance: agents do not operate with the same incentives and constraints as regulated institution financial institutions, and thus there would be challenges in ensuring they comply with the applicable regulatory requirements.

Ultimately, agent banking is just another way to recruit and serve customers, one in which technology is supplemented by human agents for maximised efficiency. Sustainable financial inclusion must be driven by both innovation and efficiency.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×