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The Long and Winding Road to Digitisation for Post Offices, Telcos and Banks

William Moroney
Blog,
William Moroney – President International

As the pandemic spread and banks struggled with their data center setups, another threat emerged on their horizons – post offices!


Competition is coming from over-the-top (OTT) players. Facebook and Netflix are key OTT players. The post office’s role has been steadily diminishing over the last few decades, with volumes of international letter-post items declining by 3% per year. However, according to Mindaugas Glodas, CEO at NRD Companies, a global IT and consulting group, post offices are a perfect tool for promoting financial inclusion. He said: “Post Offices can be an intermediary for citizens and small businesses in remote areas which need to make financial operations, like remittances and bill payments, necessary for sustaining their activities.” “Post offices have been functioning this way in cities for quite some time, and it is time to transform Post Offices in rural areas. This would make a huge positive impact on the economy as a whole.”


However, Glodas says this can only be achieved if post offices undergo a complete digital makeover, which means implementing the necessary technical systems to offer new, digital financial services and retrain the postal staff. They will have to prepare in the same ways as the banks and telcos.


“There are three growth areas where post offices should pay the most attention,” said Glodas. “The first one is improving and rediscovering new financial services like creating and extending the remittance service capability and offering bill payment options. The second one is transforming the post office into a public service hub and delivering public services like a declaration of residence. The final one involves seeing the post office as a critical part of growing e-commerce, collaborating with multiple logistics providers, and acting as parcel drop-off and pick-up in specific locations.”

In Africa, sending remittances through the post office to migrant workers’ families in remote locations is one of the most used financial services. Digitization of the service in Benin, Ghana, Madagascar and Senegal has reduced the cost of sending remittances via post offices by 42%. It has opened the door for a more comprehensive selection of financial services, which contributed to increased financial inclusion.


Postal companies access and serve customers at scale through vast branch networks. Postal companies that operate all or most of their branches have a deeper understanding of their customers because they are more likely to have big data. These operators will be better positioned to meet their customers than companies with dense but fully outsourced networks. Postal carriers should also be known and trusted brands in their communities, with frequent human interaction, to leverage foot traffic and increased in-person interaction post-pandemic to springboard into the financial-services ecosystem.
The fast-shrinking pool of postal profits makes it urgent for many postal companies to find new ways to generate value.

Egyptian National Post Organization – from Legacy Systems to Digital Leader in One Leap
The Egyptian National Post Organization (ENPO) wanted to spearhead the country’s drive to increase financial inclusion among its 98 million citizens.


To improve the customer experience at its 4,000 branches, ENPO looked to help employees process requests quickly with digital tools. ENPO saw the need to replace its legacy environment andand moderniz its core and front-end architecture, deploying Temenos Technology which included; core banking , digital banking, payments and analytics solutions . This enables ENPO to optimize operations with functionality for omnichannel delivery, customer acquisition, account servicing, and seamless in-branch interactions.


Attractiveness of the banking market
Postal companies could meet underserved needs and segments by offering financial products that incumbents cannot.
More countries are turning to the post office to offer on-the-spot financial services in pursuing financial inclusion. However, Post Offices will have to digitize their infrastructures to allow them to provide the advanced services that fully digital banks and Fintechs provide. This includes ensuring that they take one of three routes:

  1. Acquiring a digital organization or start-up: utilizing an up-and-running solution allows organizations to be quickly brought up to speed from a digital aspect.
  2. Partnering with a digital vendor to produce and implement a white-label offering.
  3. Organically building an internal offering allowing a proprietary platform to be built and owned by the business.

An organization must commit to implementing a transformational end-to-end roadmap when digitizing its operations to consolidate all e-banking channels and shift from a multi-channel approach to an omnichannel one. This creates a single digital platform while positioning the financial institution to meet the needs of its customer base


Post office banking is only one variation of agent banking, which is increasingly practised worldwide, turning supermarkets, convenience stores, pharmaceutical retailers, and even lottery outlets into banking outlets. It may be a long and winding road, but it will lead to success in the end!