Mobile Banking

Bangladesh Institute of Bank ManagementMirpur, Dhaka-1216.

Presented By 

Md. Mahbubur Rahman Alam

B. Sc. (Statistics) Dhaka UniversityM. Sc. (Econometrics) Dhaka

UniversityPGD (ICT) BUET, M. Sc. (ICT) BUETAssociate Professor, BIBM, Mirpur,

Dhaka.

Cell: 01556323244 Mail: alam_mr@bibm.org.bd

Website: mralam.net    

Many, Many Excluded

High-Income Economies

89%East Asia &Pacific

55%

Europe &Central Asia

45%

Latin America & Caribbean

39%

South Asia

33%Sub-Sahara Africa

24%

Middle East & North Africa

18%

Source: Global Findex Database, World Bank (2014)

77% of the poor excluded

Percentage of adults with account at formal financial institution

3

Average Cost Per Transaction (1998)

USA India Bangladesh

Manual Branch Banking

$ 1.27 Rs. 256 Tk. 200

Computerized Branch Banking

$ 1.14 RS. 150 Tk. 150

Phone Banking $0.52 Rs. 15 -

ATM Banking $ 0.27 Rs. 27 Tk. 40

Mobile Phone Banking

$0.16 - -

Internet Banking $0.10 Rs. 11 -

Average Cost Per Transaction (2013)

Mobile Subscribers in the World

Source: ITU, 2014

Mobile Phone Subscribers per 1000 inhabitants and by Region 2014

Source: ITU, 2014

Share of mobile-cellular subscriptions, by level of development (2000, 2005, 2014*)

Mobile Subscribers in Selected Countries

Source: ITU, 2014

Top 20 Countries by Mobile Phone per 100 People

Source: ITU, 2014

Mobile Subscribers in SAARC Countries

Source: ITU, 2014

Mobile Phone per 100 Inhabitants in SAARC Countries

Source: ITU, 2014

Rank Country Usage in 2014

1  South Korea 47%

2  China 42%

3  Hong Kong 41%

4  Singapore 38%

5  India 37%

6  Spain 34%

7  United States 32%

8  Mexico 30%

9  Australia 27%

10  France 26%

10  United Kingdom 26%

12  Thailand 24%

13  Canada 22%

14  Germany 14%

List of Countries by Mobile Banking Usage

Mobile Banking Users in Europe

Mobile Banking in US

Features of Mobile Banking Used by Customers in US

Mobile Banking in Developing Countries

Source: The Economist: Sep 20th 2014.

Mobile Users in Bangladesh (in million)

Total: 131.436 Million !Source: BTRC September, 2015

42%

25%

22%

7%

1%3%

Grameen Phone Ltd. (GP)Banglalink Digital Communications Lim-itedRobi Axiata Limited (Robi)Airtel Bangladesh Limited (Airtel)Pacific Bangladesh Telecom Limited (City-cell)Teletalk Bangladesh Ltd. (Teletalk)

Internet Subscribers (BTRC: September, 2015)

Operator Subscriber

Mobile Internet 51.982

WiMAX 0.165

ISP + PSTN 1.911

Total 54.058

According to the BTRC the mobile subscriber base in

Bangladesh hit 131.436 million in the September

2015.

On an average (131.436 million x 12 x Tk. 150.00)

Tk. 23,658.48 Crore or (117.577 million x 12 x Tk.

300.00) Tk. 47,316.96 Crore is loaded to the Mobile

Accounts per year!

Mobile Banking? Customers are Ready!

Purpose of Mobile Financial Services

Source: Data: PSD, BB; Compilation: FSD, BB

Innovations in cost efficient off branch financial services delivery under Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) laws and regulations

Reduce use of cash and its associated costs

Promote access to formal financial services at affordable cost especially for the poor and unbanked population segments

Purpose of Mobile Financial Services

Source: Data: PSD, BB; Compilation: FSD, BB

Disbursement of inward foreign remittances,

Cash in/cash out into Mobile Accounts through agents/bank branches/ATMs/Mobile Network Operator (MNO) outlets.

Person to Business payments - e.g. Utility bill payments, merchant payments, deposits into savings accounts/schemes with banks, loan repayments to banks/ Nonbank Financial Institutions(NBFIs)/ Micro-Finance Institutions (MFIs), insurance premium payments to insurance companies, and so forth.

Purpose of Mobile Financial Services

Source: Data: PSD, BB; Compilation: FSD, BB

Business to Person payments e.g. salary disbursements, dividend/refund warrant payments

Loan disbursements to borrowers, vendor payments, etc.

Government to Person payments e.g. pension payments, old age allowances, freedom-fighter allowances, input subsidy payments to farmers, and so forth.

Person to Government payments e.g. tax, fee, levy payments etc.

Person to Person payments (from one Mobile Account to another Mobile Account).

  2013 2014 2015 ( Only October)

Number of Banks Permitted 28 28 28

Started MFS Operation 19 19 20

Registered Customers 1,31,80,000 2,51,86,250  2,92,12,180

Agents 1,88,647 5,40,984  5,42,400

Number of Transactions (Millions) 228.85  589.48 106.42

Transactions ( BDT Billion ) 664 1,031.55 150.65

A Holistic View of the Mobile Financial Service Status

Source: Data: PSD, BB; Compilation: FSD, BB

Mobile Financial Service Status (August-October, 2015)

Source: Data: PSD, BB; Compilation: FSD, BB

Serial no.

Description August, 2015 September, 2015

1 No. of approved Banks 28 28

2 No. of Banks started to convey the service 20 20

3 No. of agents 533,898 542,400

4 No. of registered clients in Lac 282.57 292.12

5 No. of active accounts in Lac 95.63 117.27

6 No. of total transaction 102,073,061 106,429,626

7 Total transaction in taka(in crore BDT) 12,841.62 15,065.75

8 No. of daily average transaction 3,402,435 3,547,654

9 Average daily transaction (in crore BDT) 428.05 502.19

Mobile Financial Service Status (August-October, 2015)

Source: Data: PSD, BB; Compilation: FSD, BB

Serial no.

Description August, 2015 September, 2015

1 Inward Remittance 2.54 3.56

2 Cash In transaction 5,399.36 6,465.76

3 Cash Out Transaction 4,689.25 5,472.80

4 P2P transaction 2,246.05 2,492.33

5 Salary Disbursement (B2P) 119.00 146.63

6 Utility Bill Payment (P2B) 117.64 168.21

7 Others 267.78 316.47

Volume of Transaction in Different Delivery Channels (2011-2014)

ATM

Debit Card

Credit Card

Internet Banking

Mobile Banking

Mobile Commerce

100 300 500 700 900 1100ATM Debit Card Credit Card Internet Bank-

ing Mobile Banking Mobile Com-

merce

2011 374.9 454.2 39.6 41.6 NaN NaN

2012 565.8 585 57 48.7 71.23 NaN

2013 654.3 775.7 62.7 90.5 517.83 982.1

2014 685.9 805.9 140.8 217.3 1031.55 NaN

Volume of Transaction in Billion Taka

Demand of Time

We will not Survive

It’s a CSR

Introduction of Micro Credit and Micro Savings

Will increase and Diversify Banking Business

Minimize usage of cash, its cost and fake note

Will be profitable in the long run

New job market will be created

Reduction of administrative cost

Government, MNOs and Agents will be benefited highly

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Economic Benefits (CTOs’ Opinion)

Source: BIBM Survey

Customers’ Awareness and Readiness

0% 10% 20% 30% 40% 50% 60% 70% 80%

I see no value in using it

I don't believe it is safe

I don't want to pay for it

I don't have enough knowledge about it

I don't know how much it would cost

I don't know whether my bank offer it

It is complicated to use

My bank does not offer it

I can't find enough information about it

I like to visit bank branch/ATM

My cell phone is not enough for banking

I dno't know what is mobile banking

I want to enjoy it

I think It will help to grow savings habit

I believe it will help to eliminate corruption

Source: BIBM Survey 2011.

Economic Benefits

Bank will get a large amount of

deposit without paying interest

Lowest transaction cost

Revenue for MNOs

Credit through mobile channel will

be increased

More Information less fraud (Less

fraudulent transaction)

Less time and cost for transaction

Bank at door step/hand

Less administrative cost

New employment

Less transportation cost

Reduction of corruption

Govt. revenue will be

increased

New business development

Roles of Government

Govt. may take initiatives that all govt. collections, subsidies and allowances

will be distributed and collected through mobile banking channels.

This will create an indirect pressure and encourage the people to open and

operate a mobile bank account.

Corruption and hassles of govt. agencies will also be eliminated.

Govt. may help through govt. media like ‘BTV’ or ‘Bangladesh Betar’ to

encourage people to achieve the mobile banking target.

Role of BB

Regulatory Framework

Payment Gateway

Audit and Monitoring

Liaison with Govt. to help for the adoption of MB.

32

Mobile Banking Problems

Awarness/Illiteracy of Customers

Providing Security

Marketing

Help Desk support

Increased Fraud

Cash Management

Model Selection

Ensuring KYC information

Application Specific Handset

Non Cooperation of Telco

Agent Selection/Management/Training

Reveneu Sharing

0 10 20 30 40 50 60 70 80 90 100

?Questions

are Welcome