Mobile Finance Services in Bangladesh
Mobile Finance Services in Bangladesh
Introduction:
The term "Mobile Financial Services" (MFS) refers to a method of providing financial services
that mixes banking with mobile wireless networks and allows customers to conduct banking
transactions. It is a process of doing financial transactions and accessing financial services
through a mobile device. This covers to make deposits, withdraw, and to send or receive funds
both transactional and non-transactional services, such as letting users examine financial data
on their Smartphone. To improve their customers' quality of life and comfort by utilizing
existing technology, several financial institutions are providing customers with innovative
services. It was a fairly new concept in Bangladesh. Specifically in our country, Mobile Financial
Services (MFS) are the most significant and increasing segment of Financial Technology. MFS
currently facilitates financial transactions for people of all social classes and occupations and
plays an important role in Bangladesh's financial sector. Although Bangladesh is a developing
and overpopulated nation, there are many prospects and potentials for this sector.
The concept of mobile banking first appeared in Bangladesh in October 2009. The City Bank Ltd.
is the first bank to introduce the concept through their mobile banking app called "City Wallet."
But on March 31, 2011, Dutch Bangla Bank Limited launched widespread mobile banking in
Bangladesh. All banks are currently attempting to launch mobile banking for their clients.
MFS quickly rose to the top of Bangladesh's FinTech sector. The majority of MFS providers in
Bangladesh work with different banks, including One Bank, Dutch Bangla Bank, and Rupali Bank.
Nowadays, MFS allows to carry out cash in and cash out transactions as well as transactions
between individuals, businesses, governments, and other governments. Receiving inbound
foreign remittances through banks is legal, despite the fact that international transactions using
MFS are not yet allowed. There are currently 59 banks operating in Bangladesh, with 10,467
branches (as of 2019). However, this figure frequently is insufficient to cover the vast majority
of the population of the country in need of financial services. Generally speaking, compared to
metropolitan areas, rural and underprivileged populations have less access to banking services.
The goal of Bangladesh's central bank is to provide banking services to the nation's unbanked
citizens. Given the need to keep advancing financial inclusion, Bangladesh Bank believes that
fully established MFS operations can lower cost and physical access barriers, allowing a
significantly larger section of the population to eventually use basic formal sector deposit and
payment services.
Gaining access to the official system may eventually result in new insurance, credit, pension,
and government payment products that benefit millions of Bangladeshis. Financial
intermediation can increase with entry into the formal financial sector, which can boost growth.
Despite the fact that there are 16 MFS providers in this country, bkash and Rocket primarily
control the industry by having the greatest market shares. Among other places, Nagad has
recently demonstrated some gratifying progress. Users of every MFS can access their services
through USSD codes as well as through mobile apps that offer a variety of capabilities.
Mobile financial services are currently quite common in Bangladesh, especially among the
younger generation and the urban population. More than 100 million individuals in Bangladesh
will be using mobile banking services as of 2021, and this number is expected to continue to
rise. Numerous elements, including the ease of use and accessibility of these services, the
growing accessibility of Smartphone, and internet connectivity all contribute to the popularity
of these services.
In Bangladesh, mobile finance has expanded quickly, but there are still a number of issues that
need to be resolved. One major issue is that many people, especially in rural regions, are
unaware of and uninformed about mobile finance services. Many individuals still don't know
what mobile banking is or how to use its services, especially those who live in rural areas. In
order to secure the proper operation of these services, there are additional worries regarding
security and fraud as well as the need for more stable and reliable mobile networks. Yet
another issue is the absence of a sufficient legal framework and infrastructure to support and
secure mobile finance services. The general infrastructure and legal framework for mobile
finance services are being improved by the government and other relevant institutions, but the
process is taking a long time.
Despite numerous obstacles, Bangladesh's mobile finance industry has a wide range of
opportunities. Mobile financial services have a sizable potential market because to the big and
developing mobile phone user base and the continuously growing economy. Additionally, there
is tremendous potential for innovation and service development as a result of the development
of new technologies like blockchain and artificial intelligence. Banks that invest in mobile
banking can access a massive market and conform to the m-commerce (The exchange of
products and services using wireless handheld devices, such as Smartphone and tablets, is
known as mobile commerce or m-commerce .) .It would enable banks to offer services in areas
where clients and their requirements are most prevalent. A large number of bank clients are
willing to pay an additional price to use mobile banking.
Conclusion:
The banking industry is the most well-known and professional in Bangladesh. The study has
revealed the services that banks have been providing to their clients since banks believe in
change. In the corporate world, it is said that change is the only constant. The chosen banks
mostly provide account opening, balance check, fund transfer, and taka withdrawal services in
order to cope with these banking circumstances. In addition to this, some banks are attempting
to offer services like bill payment and minimum balance alerts. However, it must be
acknowledged that because mobile banking is still extremely new, the chosen institutions do
not yet have a clear understanding of its exact nature. Some customers desire the banks to
continue expanding their offerings for this banking system, which is why they do so. But it is a
subject of great expectation that the majority of customers are satisfied. This is improving the
future of Bangladesh's banking industry overall and for mobile banking specifically.