>> See discussion paper
Source: Global Findex database 2011-2017, UPU postal statistics and annual reports of PFIs.
N.B.: Findex data concern 158 countries, only for 69 countries data on accounts at PFIs are available in reports of PFIs and UPU.
Number of countries
Model / Status
Providing access to:
Corporatized, licensed PFIs
1 billion clients with 1.8 billion accounts
0.4 billion users of agency services
Corporatized, licensed FIs
agency banking via post offices
N.D. as regards clients with accounts
PFIs in transformation with
100 million clients with accounts
100 million users of agency services
Postal networks with a potential to be leveraged in agency banking to expand access
Corporatized, licensed PFIs fully digitized, not using post offices anymore
mission to financial inclusion and cashless money completed: DK, EST, FIN, N, NL, S
PFIs terminated; market potential perished in view of competition and digitalization
Postal networks sharply reduced -no specific potential to add to financial inclusion
Source: The Banker's Top 100 World Banks; 30 June 2017 and Research PFID
Postal Mail Service
and the PFI
PFI as part of a state postal service
PFI as separate legal entity in cooperation with a corporatized Postal operator
In most cases it concerns specific legislation for the PFI or Post, and with additional decrees, often issued several decades ago, and referring to international postal treaties.
The legal framework positions the PFI outside the financial sector with separate legislation per product operation, i.e. a postal money order service, a postal checking account service and a postal savings operation
Financial sector laws and regulations applicable, similar as for other financial institutions.
In principle operating in a fair level playing field.
State-owned PFIs are typically obliged to accept any customer for its basic financial services (e.g. payments account), regardless of income, or address, and are regarded as an accessible alternative for private, commercial banks.
The role of the PFI and usage of post offices can be part of the National Financial Inclusion Strategy and other financial sector policy documents.
The inclusion of PFI reforms in such policy documents also support the eligibility for support by Development Finance Institutions.
In general, governed by one executive with focus on postal operations, and with some political affiliation to the Minister. The selection of the PFI management may also be impacted by political preferences while public servant pay scales pose often severe limitations in recruitment of management with the required professional skills, knowledge, experience, and independence. Conflicts of interest may exist. With the State as ultimate owner, risk governance, a comprehensive and robust system of risk management of a sound internal control system are often considered as low priority.
The appropriate dialogue within the organization is not a typical part of the corporate culture which is more often dominated by executive orders, nor, or rarely, with other key stakeholders such as the financial regulators, interbank payment system and major clients.
Management is structured with a (Supervisory) Board made up of independent minded professionals representing the shareholders' interests.
The executive management is selected by the Board on the basis of objective criteria regarding professional skills, knowledge, experience, and independence. Potential conflicts of interest need to be disclosed and managed. The management is day-to-day responsible for the PFI's information, information technology and information security. The board, committees and individual directors is usually supplied with information in a timely manner and in an appropriate form and quality in order to perform to required standards. The board, committees and individual directors have their performance evaluated and are held accountable to appropriate stakeholders. The board should be transparent, fair and consistent in determining the remuneration policy for directors and senior executives, proportionate to the PFI's condition and performance.
In general, with management being part of the civil service, there are often no contracts setting performance targets, nor reporting on their contribution to the actual financial and market performance is common practice.
In some more advanced cases, there is a “social contract" that sets the annual goals of the entity to be achieved by the management
Internal audit is typically limited to some internal, operational checks or control.
External audit is most often limited to the Auditor-General's office or a National Accounting Chamber.
Internal audit is a relatively independent, professional unit directly reporting to the (Supervisory) Board of Directors.
The independent external audit is done by certified professionals to reveal a proper, fair and transparent insight in the financial condition and performance of the PFI. The audited Financial Statements are instrumental for oversight and an enabling condition to do business with potential partners in the private and financial sector.
Corporatized PFIs and Posts tend to reduce fixed assets and related fixed cost (depreciation, maintenance) and to focus on operations of which the cost can be flexibly adjusted to the business and revenues generated.
Non-current assets are typically valued at market prices and accordingly depreciated.
Staff is often employed on conditions as, or similar to civil servant, all on a full-time basis, with job security, and low but fixed pay scales. No incentives. Average age is often above 50. Recruitment for vacancies is first from within. possibly high degree of unionization, and social employment.
This can be further analyzed in KPIs as e.g. revenues per FTE, transactions per FTE or mail items per FTE.
HR Management is mainly administrative, and for payroll accounting. Limited facilities for training.
HR Management tends to consider the PFI employees as “capital". It includes talent scouting, career planning and management development and other wasy developing employees so that they become more valuable to the PFI
Human Resource Management includes conducting job analyses, planning personnel needs, recruitment, orienting and training, managing wages and salaries, providing benefits and incentives, evaluating performance, resolving disputes, and communicating with all employees at all levels, and support to creating a corporate culture.
In general, the access to medium-term or long-term finance is very constrained. In a few cases Bonds or Debentures with a similar status as Treasury Bills can be issued upon the Ministry of Finance's approval.
If short-term finance resources are made available it tends to in the framework of the Annual State Budget, as a fiscal intervention or subsidy.
Option to arrange asset-backed finance (using postal properties) is in general not available.
Not seldom the PFI is obliged to provide working capital or other types of financing to the Post on preferential terms. The PFI sources this with money from clients.
A significant part of PFIs in the early stage of reform tend to focus on organic growth of the entity, not via partnerships, for which several enabling conditions are absent. Depending on the exact form of the state PFI entity, partnerships tend to be relatively loose relationships which can be terminated at short notice.
Partnerships typically do not or cannot engage commitment to invest in the PFI.
The number and profile of the business partners provides usually an indication of the PFI's management capacity and commitment to develop the business.
An exception to the above regards Public-Private Partnerships (PPPs), which are usually structured with extensive preparation and with external or professional transaction advisers. Such PPPs can include Concession agreements, or e.g. Build-Operate-Transfer contracts or Outsourcing of some of the functions of the PFI.
Many of the corporatized PFIs seek building partnerships with e.g. specialized Financial Institutions to complete their product range, to accelerate their business development, or to outsource a part of the non-core operations in which economies of scale are not achievable.
The partnerships are arranged through contracts, or joint-ventures or new company structures.
Competitiveness is not warranted. In some cases, the PFI can be considered as a government initiative where market initiative fails. These cases are relatively easy to identify on the basis of a relatively large number of small clients which they serve. The proximity of the post offices, and the low threshold to access the services play a significant role.
This is opposite to the cases where the PFI turned into a government failure with a declining or small market share.
Competitiveness can be considered as a prerequisite for business continuity of the PFI and is most typically found in the branding and positioning of the PFI with a strong focus on the un(der)banked mass market with post offices as entry points to a set of relatively simple digital financial services and as such somewhat different from other retail banks.
>> See discussion paper