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    Mobile financial services first appeared in Bangladesh in 2009 through a mobile banking app. In 2011, widespread mobile banking launched, allowing customers to conduct transactions through their mobile devices. Now major providers like bkash and Rocket dominate the market, facilitating transactions between individuals, businesses, and governments. While mobile banking is growing in popularity among younger urban populations, challenges remain such as lack of awareness in rural areas, security concerns, and insufficient infrastructure. However, with Bangladesh's large mobile user base and growing economy, the industry has significant potential to expand access to financial services.

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    Information System in Business Assignment

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    Mobile finance services in Bangladesh

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    Mobile financial services first appeared in Bangladesh in 2009 through a mobile banking app. In 2011, widespread mobile banking launched, allowing customers to conduct transactions through their mobile devices. Now major providers like bkash and Rocket dominate the market, facilitating transactions between individuals, businesses, and governments. While mobile banking is growing in popularity among younger urban populations, challenges remain such as lack of awareness in rural areas, security concerns, and insufficient infrastructure. However, with Bangladesh's large mobile user base and growing economy, the industry has significant potential to expand access to financial services.

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    30 views4 pages

    Mobile Finance Services in Bangladesh

    Uploaded by

    sn n
    Mobile financial services first appeared in Bangladesh in 2009 through a mobile banking app. In 2011, widespread mobile banking launched, allowing customers to conduct transactions through their mobile devices. Now major providers like bkash and Rocket dominate the market, facilitating transactions between individuals, businesses, and governments. While mobile banking is growing in popularity among younger urban populations, challenges remain such as lack of awareness in rural areas, security concerns, and insufficient infrastructure. However, with Bangladesh's large mobile user base and growing economy, the industry has significant potential to expand access to financial services.

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    of 4

    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.

    History of mobile financial services in Bangladesh:

    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.

    Current scenario of mobile financial services in Bangladesh:

    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.

    Top Mobile Financial Services (MFS) Providers in Bangladesh:

    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.

    Position of Financial Services (MFS) Providers in Bangladesh:

    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.

    Challenges of Financial Services (MFS) Providers in Bangladesh:

    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.

    Prospects of Financial Services (MFS) Providers in Bangladesh:

    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.

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