Current Status of E-Banking Md. Mahbubur Rahman Alam Associate Professor, BIBM Bangladesh Institute of Bank Management (BIBM)

2 Classification of Banks According to BB Guideline Source: Survey Information

3 Computerization of Bank Branches Source: Survey Information

4 IT Investment (Crore) Total investment up to 2014 was estimated at Tk. 23,149 crore since 1968 (considering the installation of computer at Agrani Bank in 1968 which was the first installation of computer in the banking sector of Bangladesh).

5 IT Budget Allocation: Source: Survey Information

6 Penetration of Computer (PC) and ID, Minimum Maximum Average Minimum Maximum Average Minimum Maximum Average No. of Computers per hundred employees No. of Official ID per hundred employees

7 Intranet Facilities used by Banks in Facilities Bulletin board service (BBS) where a message is displayed instantly to be seen by all employees who logs into the system To view employee information (name, designation, phone, etc.) 2748 Bank’s circular with a search engine2052 Group collaboration service where a group of employees working in a task force can collaborate to execute their activities. Audio / video chatting with IP phone Attendance of employee through user login1316

8 Source: Survey Information Some Important Ratios IT Employees : Non IT Employees Min Max Min MaxMinMaxMinMax State-Owned1 : 100 1: : 99 1 : 2031 : 951 : 2011 : 921 : 198 Specialized1 : 32 1 : : 31 1 : 5191 : 311 : 5121 : 301 : 508 Private1 : 26 1 : 92 1 : 26 1 : 881 : 221 : 851 : 201 : 82 Foreign : 151 : 351 : 141 : 35 IT Employees : Computerized Branch Min Max Min MaxMinMaxMinMax State-Owned1 : 7 1 : 14 1 : 7 1 : 131 : 61 : 141 : 51 : 13 Specialized1: 15 1 : 54 1: 15 1 : 541: 151 : 541: 151 : 51 Private1 : : : : 2.11 : : 3.61 : : 3.4 Foreign : : 2.11 : : 2.1

9 Classification of Banking Software (% of Banks ) Source: Survey Information

10 Replication and Clustering (% of Banks) Source: Survey Information In 2011, only 78% banks had real-time database replication technology, whereas in 2014, it increased to 84%. However, research findings show that, still 16% banks may not able to provide accessibility of data in case of any technical fault in the production database server. Types of Clustering Clustered Network Server88814 Clustered Database Servers Clustered Application Servers

11 Application Software On an average 23, minimum 6 and maximum 80 application software are being used in the banks. Minimum 40% to maximum 100% are web based. But on average around 80% software are based on three tier web based architecture.

System Software (OS) Source: Survey Information ClientServer Licensed Free Client OS% Windows Linux Google Unix Mac Server OS

13 Data Center and Disaster Recovery Site Source: Survey Information 71% banks have centralized database operations through data center having DRS. Only 16% banks have Certified Data Centre Design Professional (CDCDP). 31.5% banks test it monthly. 12.5% banks test it Quarterly. 28% banks test it half yearly and 17.5% yearly. Rest of the 10.5% banks did not mention their testing duration. 50% of the banks are afraid of testing the disaster recovery site by shutting down the data center any time! Types of DRS Hot Warm Cold

14 Source: Survey Information In case of any disaster, disaster recovery plan plays an important role. About 33% banks have approved guidelines of BCP/DRP. Among the banks all are following the BB ICT Security Guidelines and 20% follow ISO standard in addition. Only 15% banks have separate BCP and DRP department. Minimum, maximum and average number of employees are working in these departments are 3, 12 and 6, respectively. Disaster Recovery Plan (DRP)

15 Dual Communication Link Used in Online Branches/ADCs Source: Survey Information Name of Link % of Total Number of Links Used Optical Fiber Radio Links Satellite/VSAT8332 Others10756

16 At the end of 2014 only 64% banks provided some sort of Internet banking services in Bangladesh, which was 61% at the end of Internet Banking

17 Ref: 3.18 Page -24 Internet Banking Facilities Sl. No. Internet Banking Facilities Fund Transfer (Customer’s A/C to A/C transfer) rd Party Fund Transfer (One customer’s A/C to another customer’s A/C) Credit card bill payment1432 4Utility bill payment (Gas, Electricity etc.)712 5Transfer fund from credit card account to his own A/C00 6Transfer fund from Bank A/C to his mobile banking A/C04 7 Transaction history of all accounts of the same customer Transaction history of all loan accounts of the same customer To view the Credit card information of the same customer To view the Mobile banking information of the same customer 00 11iRecharge (Mobile Airtime Top Up) Wimax Recharge1422

18 Internet Banking Problems

19 There were 5,661 ATMs in Bangladesh at the end of Most of the ATMs are installed in the divisional cities and district level. Around 49% ATMs are installed in Dhaka. A very few ATMs are being operated in rural areas, less than ATM Banking

20 ATM Banking Problems

Number of Banks Permitted 28 Started MFS Operation 19 Registered Customers 1,31,80,000 25,186,250 Agents 1,88,647 5,40,984 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

Volume of Transaction in Different Delivery Channels ( )

23 BACH

24 BEFTN The Bangladesh Electronic Fund Transfer Network (BEFTN) started its operation on 28 February On average, approximately 20,950 EFT transactions were processed in a day in The total monetary amount of EFT transactions under BEFTN in 2012 and 2011 was Tk and 18.7 billion, respectively. On average, approximately 21,072 EFT transactions were processed in a day in Total monetary amount of EFT transactions under BEFTN in 2013 was Tk billion, which is 44 percent higher than 2012.

25 Trends in Technology Adoption Source: Survey Information

26 Types of Training Provided (% of Total Training) Source: Survey Information 58 % of CTOs are not Satisfied ! Only 2% IT Budget goes to Training !

27 Why Training was not Provided?

Bangladesh Institute of Bank Management (BIBM) Thanks for Patience Hearing Current Status of E-Banking