Beautiful Virgin Islands

Wednesday, Sep 17, 2025

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.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
×