Mobile Banking Bangladesh Institute of Bank Management Mirpur, Dhaka Presented By Md. Mahbubur Rahman Alam B. Sc. (Statistics) Dhaka University M. Sc. (Econometrics) Dhaka University PGD (ICT) BUET, M. Sc. (ICT) BUET Associate Professor, BIBM, Mirpur, Dhaka. Cell: Mail: 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) USAIndiaBangladesh Manual Branch Banking $ 1.27Rs. 256Tk. 200 Computerized Branch Banking $ 1.14RS. 150Tk. 150 Phone Banking $0.52Rs. 15- ATM Banking $ 0.27Rs. 27Tk. 40 Mobile Phone Banking $ Internet Banking $0.10Rs. 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

RankCountryUsage in 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: Million ! Source: BTRC September, 2015

Internet Subscribers (BTRC: September, 2015)

According to the BTRC the mobile subscriber base in Bangladesh hit million in the September On an average ( million x 12 x Tk ) Tk. 23, Crore or ( million x 12 x Tk ) Tk. 47, 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).

( Only October) Number of Banks Permitted 28 Started MFS Operation 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) Transactions ( BDT Billion ) 664 1, 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. DescriptionAugust, 2015September, No. of approved Banks28 2No. of Banks started to convey the service20 3No. of agents533,898542,400 4No. of registered clients in Lac No. of active accounts in Lac No. of total transaction102,073,061106,429,626 7Total transaction in taka(in crore BDT)12, , No. of daily average transaction3,402,4353,547,654 9Average daily transaction (in crore BDT)

Mobile Financial Service Status (August-October, 2015) Source: Data: PSD, BB; Compilation: FSD, BB Serial no. DescriptionAugust, 2015September, Inward Remittance Cash In transaction5, , Cash Out Transaction4, , P2P transaction2, , Salary Disbursement (B2P) Utility Bill Payment (P2B) Others

Volume of Transaction in Different Delivery Channels ( )

Economic Benefits (CTOs’ Opinion) Source: BIBM Survey

Customers’ Awareness and Readiness 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

? Questions are Welcome