Lucas Osagede is the co-founder of LiquidSpace Solution Limited and Sales Director. Passionate about financial inclusion and the transformative power of agency banking, he played a key role in expanding access to financial services for underserved populations.

In this exclusive interview with The Guardian, Lucas shared his insights on the evolution of agency banking in Nigeria, the impact of digital technologies, and his vision for a more inclusive financial ecosystem.

What inspired you to venture into agency banking, and how do you see this sector evolving in the Nigerian financial ecosystem?
I was inspired to venture into agency banking while working at Diamond Bank, where my team was tasked with setting up the business. We noticed a gap between the mass market, especially the excluded and under-served populations, and traditional banks. The excluded population believed banks were only for the rich, while the under-served had limited time to visit banks during the day.

This motivated us to provide an alternative channel for banking services and educate people about its benefits. This drive has paid off, and I believe the sector will continue to evolve in the Nigerian financial ecosystem.

Can you share the key milestones in your journey that led you to become a prominent figure in the agency banking sector in Nigeria?
I have led projects in digital transformation within Agency Banking, setting up two businesses in major banks in Nigeria: DiamondClosa (now AccessClosa by Access Bank) and UnionDirect by Union Bank. I also championed the redesign and launch of RexAgent by Accelerex Network.

Could you highlight some challenges you faced while establishing the DiamondClosa and UnionDirect networks, and how did you overcome them?
While establishing the DiamondClosa and UnionDirect networks, we encountered significant challenges, particularly during the rollout of DiamondClosa due to the low market acceptance of Agency Banking. Challenges included concerns about robbery, customer reluctance to adopt the platform, and liquidity management issues.

To address these challenges, we implemented daily transaction limits for agents to manage cash flow and mitigate the risk of holding excess funds. We also engaged with local police stations to ensure quick response in case of robberies. To encourage customer adoption, we conducted market awareness campaigns near agent locations and equipped agents with a BETA account opening tool, empowering them to onboard their customers. Additionally, we improved liquidity management by assigning agents to specific branches, granting them access after hours to deposit or withdraw funds.

What role do you believe agency banking plays in financial inclusion, particularly in regions with limited access to traditional banking services?
Agency banking is a crucial part of the evolving banking system, particularly in regions with limited access to traditional banking services. It plays a key role in customer acquisition, with SANEF implementing the extension of bank account opening services to super agents.

Moreover, agency banking has led to the reactivation of old accounts and the opening of new ones due to increased proximity to banking services. This is especially beneficial for individuals looking to save funds regularly. Additionally, agency banking has created employment opportunities as individuals become agents, allowing them to earn income to meet their needs.

How do you envision the future of agency banking, especially considering the rapid advancements in digital and financial technologies?
Agency Banking, a digital product, will continue to evolve with technological advancements. Currently, pay-with-transfer services are widely accepted in this space, with more cardless options like QR codes, biometric authentication, and NFC payments set to be introduced.

This evolution will expand the range of digital products available to the public, including micro-pension payments, government collections, local remittances via vouchers, and the implementation of AI for customer data analytics.

What are some innovative strategies you have implemented to drive customer engagement and loyalty within the agency banking ecosystem?
We have implemented several innovative strategies, such as financial literacy sessions emphasising the importance of savings, regular agent training, engaging on social media for awareness, reward programs to enhance loyalty, and leader-board programs to encourage community and agent participation.

As the Sales Director, what initiatives have you spearheaded to ensure sustained growth and profitability in the agency banking business?
As Sales Director, I have spearheaded initiatives to drive sustained growth and profitability in the agency banking business. One key initiative has been the implementation of leader-board programs to foster active participation and healthy competition among agents. Being recognized as a top performer is rewarding, and it motivates others to strive for the same.
Additionally, we’ve focused on regional and targeted acquisition of agents in areas proven to drive agency banking activities. We have also introduced a tiered fee structure based on transaction value and volume, incentivizing agents to increase transactions to enjoy discounted fees. These efforts have resulted in increased revenue and transaction volume.

Can you elaborate on the impact of the RexAgent platform and the additional service centers on customer acquisition and service delivery at Accelerex Network Limited?
The RexAgent platform serves as an Agency Banking tool and enhances retail customer acquisition. Customers who sign up and transition to higher KYC tiers gain full access to wallet account benefits, enabling them to receive transfers, conduct outward transfers, pay bills, and more. Additionally, the service centres function as hubs for agent enrollment, work-tool setup, POS terminal distribution to aggregators, and overall promotion of Agency Banking transactions.

How do you navigate regulatory challenges and compliance issues in the agency banking sector, ensuring adherence to standards and regulations?
One of the essential ways to avoid regulatory challenges and compliance issues in the agency banking sector is to stay informed about the regulatory framework. Also, regular communication within the team fosters compliance. Managing agent liquidity and monitoring transactions are essential to detect suspicious activity.
In addition, introducing sections on Anti-Money Laundering (AML), Counter-Financing of Terrorism (CFT), and Customer Protection Framework (CFP) into agent training helps maintain awareness.

What advice would you give to aspiring entrepreneurs and professionals looking to make a mark in the digital financial space, particularly in agecy banking?
My advice to aspiring entrepreneurs and professionals looking to make a mark in the digital financial space, particularly in agency banking, is first to understand the market through thorough research. Identify target areas for launch, the type of acquisition model to use, and your entry strategy. It’s crucial to understand and adhere to regulatory requirements.
Look for a platform in the market that can be white-labelled for you; we can provide this for you. Have a clear vision, including a scalable model for expansion, and then start. There’s no right time to start, just start. When in doubt, reach out to industry experts who can guide you.

How do you balance the need for innovation and the practical considerations of scalability and sustainability in your business strategies?
To balance innovation with scalability and sustainability in our business strategies, we focus on core operations while identifying areas for innovative alignment with our vision. This approach addresses customer needs and market gaps. Maintaining a cross-functional team fosters collaboration and continuous learning, ensuring business sustainability.
Finally, please share more about your vision for the tech hub aimed at providing free business skills training and fostering economic growth in the community.

Our tech hub is set to launch by the second quarter of 2025, offering free business skills training to individuals who lack financial means. We’ll select participants through various methods, including direct sourcing, social media recommendations, and local community referrals. Our goal is to empower people with the skills they need to pursue their career aspirations. We’re in the process of partnering with trainers in areas such as programming, cloud computing, cybersecurity, and AI. Additionally, will be exploring internship opportunities to allow participants to apply their newfound knowledge in real-world settings.