a) A bank’s channel of distribution refers to the various methods, platforms, and intermediaries through which a bank delivers its financial products and services to customers, ensuring accessibility, convenience, and efficiency. This includes physical outlets like branches and ATMs, digital channels such as mobile apps and online banking portals, and hybrid options like agency banking or partnerships with fintech firms. In the Ghanaian context, under the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) and the Payment Systems and Services Act, 2019 (Act 987), these channels must comply with BoG directives on security and inclusion, such as the Cyber and Information Security Directive 2020, to facilitate seamless service delivery while mitigating risks. For example, Stanbic Bank Ghana utilizes a multi-channel approach, combining branches for high-value transactions with mobile banking for everyday needs, aligning with Basel II/III principles adapted for operational resilience.

b) Physical location remains vital in banking, even amid digital transformation in Ghana’s post-2017-2019 cleanup and DDEP recovery era, where trust rebuilding is key. Below, I list and discuss three reasons, drawing from practical operations at banks like Ecobank Ghana and GCB Bank, emphasizing compliance with BoG’s sustainable banking principles.

1. Enhances Customer Trust and Relationship Building: Physical branches provide face-to-face interactions that foster trust, especially for complex services like loan approvals or wealth management, where personal reassurance is crucial. In Ghana, following the collapses of banks like UT Bank due to governance issues, customers often prefer in-person verification to ensure compliance with the Corporate Governance Directive 2018. For instance, during the 2022-2024 DDEP, Access Bank Ghana’s branches served as hubs for explaining impacts and restructuring investments, reducing anxiety and building loyalty. Despite digital convenience, customers value the reassurance provided by physical branches, particularly in a market where digital literacy varies. This human element supports ethical practices and long-term relationships, contributing to profitability through repeat business.
2. Improves Accessibility and Inclusion for Underserved Segments: Physical locations ensure banking access in areas with limited digital infrastructure or for populations uncomfortable with technology, such as rural or elderly clients. As of recent data, physical banks are available to nearly 51 percent of Ghana’s urban population, highlighting their role in bridging gaps where internet penetration is inconsistent. In practice, GCB Bank’s branch network in remote regions complements agency banking under BoG’s fintech regulations, allowing cash transactions and KYC processes that digital channels may not fully support due to connectivity issues. This aligns with the Liquidity Risk Management Guidelines, ensuring cash availability and promoting financial inclusion post the banking sector cleanup.
3. Provides Competitive Visibility and Local Market Penetration (5 marks): A strategic physical presence increases brand visibility and attracts walk-in customers, offering a competitive edge in densely populated or emerging markets. In Ghana’s evolving sector, with ongoing branch expansions despite digitization, physical sites enable localized services like seminars on sustainable banking, as per BoG Notice No. BG/GOV/SEC/2023/05 on recapitalization. For example, Ecobank Ghana’s urban branches serve as anchors for cross-selling insurance or pensions, integrating with digital tools for hybrid experiences. This location strategy balances cost with revenue, adhering to operational risk standards under Basel frameworks, and counters fintech competition by offering tangible service points in a cash-reliant economy.