A descriptive mapping of banking correspondent network management models in Brazil

Abstract

Although many studies have appeared in recent years focusing on the growth of so-called banking correspondents (BCs) in Brazil and their role as a banking channel for the poor, there is an important gap in this literature, related to understanding the different ways through which BC networks can be hired and managed. The aim of this article is to identify and map the diversity of business configurations - or network management models - used by Brazilian banks to build up the channel. To this end, we adopted a taxonomic method, which allowed us to distinguish six different network management models currently in use in Brazil. Such models were in turn grouped into three classes of network management activities, according to the degree of delegation by banks to subcontractors. The result is an unprecedented map of the different business configurations applied in the operation of the Brazilian BC channel. The relevance of this contribution derives from the scarcity of references to the topic in previous studies, as well as from the importance acquired by the BCs in recent years for delivering bank services to the low-income population.