Mobile Banking in Bangladesh
Content
Contents
Summary ....................................................................................................................................................... 2 Introduction .................................................................................................................................................. 3 Mobile Banking ............................................................................................................................................. 4 Mobile Banking across the globe .................................................................................................................. 5 Infrastructure for Mobile Banking ................................................................................................................ 6 Future of Mobile Banking ............................................................................................................................. 7 Mobile Banking in Bangladesh ...................................................................................................................... 7 bKash Limited ................................................................................................................................................ 8 Mission of bKash Limited .............................................................................................................................. 9 Product and services ..................................................................................................................................... 9 Benefits of using bKash Limited .................................................................................................................. 11 Findings and Analysis .................................................................................................................................. 12 SWOT Analysis............................................................................................................................................. 15 Conclusions ................................................................................................................................................. 16 Recommendations ...................................................................................................................................... 16 References .................................................................................................................................................. 18 Appendices.................................................................................................................................................. 19
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Summary
Mobile banking is gaining ground among the people in Bangladesh within a short span of time for facilitating its easy transaction services. Mobile Banking or m-banking is a substitute of general banking system. In this system all the banking procedure has been complete through the mobile device. Mobile Banking is widely using for the transaction of money in different parts of world. The procedure of mobile banking is implemented mainly through three different technological solutions, these are browser-based, applications, messaging- based application and client based applications. The government along with the country's central bank, is giving a greater focus now than ever before on supportive efforts to bring a large number of people under the banking channel by using mobile banking service as only a quarter of the country's population has now access to the formal banking sector. Poverty and lack of education and awareness are the main obstacles, preventing an estimated 60% of the population from having access to financial services, according to the latest annual report of the BB so without any doubt mobile banking can be an effective substitution for branch banking here. The Brac Bank-initiated mobile banking service, 'bKash', is at present the country's leading service-provider in mobile banking. There are, in all, 16 such service-providers, all of them being in the banking sector. bKash Limited is the market leader in the mobile banking sector of Bangladesh until now as it is affiliated by Brac Bank and its media exposure. Mass population aware of bKash and treated its service as sending money quickly and safely without muck paperwork. bKash took the first mover advantages in mobile banking. In this paper I am going to talk about bKash operation in Bangladesh, their objective, how they run business, what are the opportunities and challenges they are facing. I try to identify the core problem of bKash Service and try to give solution to overcome those problems and carry their business successfully. Mobile banking is untapped market and bKash has grab that market and there is a huge demand for this service and logically it should work well in Bangladesh as it worked in the nearby countries. But there is some drawbacks as people find it unreliable and unsafe and there is also allegations against some agents making delays deliberately to send money to the customers for their cash withdrawal in time and taking extra charge over the listed rate. bKash should monitor their agents properly through their network and ensure better customer service to retain their first mover advantages.
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Introduction
Importance of banking system in a developing country increases rapidly because of fast economic growth. It is quite impossible for any country to develop in industrial and commercial sector without sound banking system in moder n economic era. General Banking and Mobile Banking is one of the significant functions of the bank. Mobile Banking is widely used for the transaction of money in different parts of country. The procedure of mobile banking is implemented mainly through three
different technological solutions, these are browser -based, applications, messagingbased application and client based applications. (Tiwari and Buse, 2007). The browserbased application is essentially a Wireless Access Protocol (WAP)-based internet access. This requires a compatible mobile phone which is WAP-enabled. The mobile phone is used to access banking portals through the Internet. On the messaging-based applications, the communication between the bank and the customer is carried out via text messages. For example, by using a registered mobile number, the customer sends a predefined command to the bank then uses text messages to conduct transactions with the bank. An example of messaging-based applications is the Unstructured Supplementary Service Data (USSD), which has compatibility with most mobile phones. The massive improvement of technologies around the world brings an opportunity to improve the technological platform of banking sector. The goal of the extending service of banks with improve technology is to satisfy the desire of customers. One of the extending services with modern technological advancement is Mobile Banking. In this process of banking customer are allowed to access into the banking system in anytime from anywhere. The requirements for this process are to have a mobile device and mobile network connection (Al-Akhras and Qwasmi, 2011). The core benefit of this mobile banking is to reach to the people who do not have the access in internet banking or in normal banking procedure. It is mostly helpful for the people of remote areas (Laukkanen and Lauronen, 2005). According to Raseda Sultana, millions of people across the developing nations are relying on informal economic activities for their living and most of these people are from the bottom stage of the pyramid. These mass populations do not have the access into the basic financial services or the regular banking system. This mobile banking brings the opportunity for these people to get the banking facility. Now the reason why “mobile banking” is getting greater emphasize because
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more there are than 4 billion mobile subscribers who represent 61% population of world. So it is the best way to reach among the biggest portion of world population (Sultana, 2009). Also, mobile banking needs less processing than general banking process. It helps the banks to reduce cost, requires less storage facility (Rose and Hudgins, 2005). Mobile Banking is also better process among all the other e-banking process. In internet banking there has the higher risk then mobile banking due to hacking system. Also to use internet banking people needs extra skills to use computer. On the other hand, to use Mobile Bank, customers’ needs to have the basic idea about how to operate mobile in daily life. So to use this mobile banking a great level of awareness is not needed to create. It is said that mobile banking is one of the best thing ever happened in the personal finance management. Through this process customers will keep them attached with the banking system all the time. This mobile banking is still in growing business. In some countries mobile banking is become very much popular while in some countries it is just in the beginning stage.
Mobile Banking
Mobile Banking is a term that is now a buzzword in the modern business world. Mobile banking generally refers to financial services delivered via mobile network and performed on a mobile phone. It is now a burning issue in the financial service. According to a news report in ‘The Daily Star” published in June 11, 2013 On average, Tk.125 crore changes hands through mobile
banking. It is a systematic set of process that enable bank customers to have bank services through
mobile phone starting from simple mobile handset Personal Digital Assistant (PDA) . Now a days mobile banking has increasingly become a necessary component of business strategy. For economic development. Due to immense advances of information and communication technology, mobile phone reached every corners of the world. It provide some attractive features for the customers than those offered by traditional banking system such as to open a bank account, depositing, withdrawing. Balance transferring and it takes less time than traditional banking system. In case of traditional banking system a fund transfer for instance used to take several days where as online banking made it possible to complete the same task within moments without incurring any cost. Online banking has one major problem which is customer needs to connected with online but mobile ban king has removed this barrier. Mobile Banking allows us to do things
quicker, cheaper, more efficiently, and with fewer people. Although mobile banking has open a
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new dimension in banking service as it is called banking in your hand but it has some limitation as many consider it as unsecured banking.
Mobile Banking across the globe
Mobile banking is used in many parts of the world with little or no infrastructure, especially remote and rural areas. This aspect of mobile commerce is also popular in countries where most of their population is unbanked. In most of these places, banks can only be found in big cities, and customers have to travel hundreds of miles to the nearest bank. Mobile Banking first introduced in 2001. From 2001 to 2006 there were only 10 Mobile Banks were in world. In 2009 it increased up to 25, in 2010 it increased up to 38 and in the middle of 2011 this number of mobile bank increased up to 50. Surprising by the end of 2011 this number reached up to 140 m-commerce organizations. The major m-commerce boom has happened in African region following by Asian countries (Mayer and Klein, 2011). In African Nations, different mobile companies are coming with the m-commerce business. Orange mobile company is running an m-commerce business with brand name of Orange Money mobile banking. They are running this business in Mali, Senegal, Madagascar, Kenya, Ivory Coast and Niger. Since 2008 they have signed up 1 million people. Though there are multiple mobile banks are working in African nations but the real impact has been made by M-Pesa. M-Pesa is a mobile bank which is a subsidiary of Vodafone. Only in Kenya, M-Pesa register more than 13 million customer, while in Tanzania, M-Pesa has 6 Million customers and in 2010 in total 670 million transactions generated through this mobile banking service. In Latin America potion Telefonica is giving the service of mobile banking in four countries. Among those countries in Brazil, mobile banking is establishing its place in good speed. It is believed that after Africa, Latin America is the place where mobile bank will have greater success. In Latin America only 35 percent people have bank account while 90 percent people have mobile phones. In northern American side, in USA almost 20% people are using mobile banking service in regular purpose. In Asian side mobile banking is also on the way of success. In Pakistan, where are only 14% regular banking subscribers in there already 500,000 customers are already subscribed with mobile banking (http://www.thecitizen.co.tz). In India till now 77 banks have received the approval for mobile banking (http://www.rbi.org.in). Friedman, Thomas (November 2, 2010) try to give an overview of mobile bank usage in India and Pakistan. Telenor Pakistan has also launched a mobile
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banking solution, in coordination with Taameer Bank, under the label Easy Paisa, which was begun in Q4 2009. Eko India Financial Services, the business correspondent of State Bank of India (SBI) and ICICI Bank, provides bank accounts, deposit, withdrawal and remittance services, microinsurance, and micro-finance facilities to its customers (nearly 80% of whom are migrants or the unbanked section of the population) through mobile banking. This mobile banking is also successful in South Korea, Japan, China and Malaysia. In Japan, there are already more than 1.5 million active mobile banking users and it is increasing (Goyal, Pandey and Batra, 2012). Maldives and Bangladesh are also joining in this race. Dutch Bangla Bank launched the very first mobile banking service in Bangladesh on 31 March 2011. This service is launched with ‘Agent’ and ‘Network’ support from mobile operators, Banglalink and Citycell. Sybase 365, a subsidiary of Sybase, Inc. has provided software solution with their local partner Neurosoft Technologies Ltd. There are around 160 million people in Bangladesh, of which, only 13 per cent have bank accounts. With this solution, Dutch-Bangla Bank can now reach out to the rural and unbanked population, of which, 45 per cent are mobile phone users. Though mobile banking have a greater success in world-wide it is not seen the success in the European region yet. It’s already failed in Spain, Austria and some Scandinavian countries. In Germany, in 2003 there were 22 banks were giving mobile banking service but in 2006 it reduced into 14. It is believed that after the establishment of 3G service in all over the Europe, then mobile banking may have success in Europe (Scornvacca and Hoehle, 2006).
Infrastructure for Mobile Banking
Mobile Banking service can be provided in two different processes. One of these are Banks can directly give the mobile banking service towards the customer. In this process banks are having their own network system. On the other hand, in other process banks are using the 3rd party for giving this mobile banking service. In this process banks are having only the database system and the service providing duty is relying on the 3rd party (Goyal, Pandey and Batra, 2012). Now, based on these services providing process, service can be delivered in two different ways. These are application based (GPRS protocol) and the other one is SMS based. In most of the countries especially in the developing countries, SMS based mobile banking is using widely. It requires very low cost and low bandwidth and also it is easy to understand (Kabir, Sakib, Sazzad, Shahnaz and Fattah, 2010).
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Future of Mobile Banking
Based on the 'International Review of Business Research Papers' from World business Institute, Australia, following are the key functional trends possible in world of Mobile Banking.With the advent of technology and increasing use of smartphone and tablet based devices, the use of Mobile Banking functionality would enable customer connect across entire customer life cycle. With this scenario, current mobile banking objectives of say building relationships, reducing cost, achieving new revenue stream will transform to enable new objectives targeting higher level goals such as building brand of the banking organization. Emerging technology and functionalities would enable to create new ways of lead generation, prospecting as well as developing deep customer relationship and mobile banking world would achieve superior customer experience with bidirectional communications. Among digital channels, mobile banking is a clear IT investment priority in 2013 as retail banks attempt to capitalize on the features unique to mobile, such as location-based services.
Mobile Banking in Bangladesh
Bangladesh is 8th largest populated country in the world with around 161 million populations. In Bangladesh, almost 31.5% populations are living under poverty (https://www.cia.gov). From this huge population only 13% people have bank account. On the other hand, there are almost 90 million mobile phone subscribers in Bangladesh among them 45% are from rural areas (The Financial Express,6 June 2012).From the point of view of Bangladesh, the expansion of e-banking is opposed by the problem of institutional, infrastructure and regulatory problems. Absence of central networking system, unskilled people and absence of proper policies are lacking behind the whole system. Bangladesh Bank is developing country’s payment system but by that time all the banks are not able to improve their ICT system. In this scenario, it’s hard to reach to mass people with current banking system. From this plot, the concept of mobile banking emerged to reach the banking facility to the unbanked people. People also take this system as good one as 69% people believe this “mobile banking” has prospect in Bangladesh (Ahmed, Rayhan, Islam and Mahjabin, 2011). Mobile banking is a new banking concept in Bangladesh. Bangladesh Bank is influencing banks to operate this mobile in a serious manner to reach to the unbanked people of Bangladesh. Bangladesh Bank believes that mobile is the easiest way to reach to the rural part of the country
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with the banking service. Still now, Bangladesh Bank has given license to 23 banks (See Appendix, Table 1) to run this mobile banking operation. Among these, 14 banks have full Mobile Financial Service permission and other 9 banks have the permission for international remittance transaction only through mobile. According to a published article on “The Financial Express” on 08 March 2013, Some 3.0 million people make now the use of different services under mobile banking. There are about 70,000 outlets of mobile banking service-providers, making the services available to the users. The extent of such services and the volume of transactions involve a sizeable amount of money, between Tk 300 million and Tk 350 million, per day, according to the data of the Bangladesh Bank (BB). Bangladesh Bank issued a guideline name “Mobile Financial Services for Banks”. This guideline is working as a clear direction for those banks. From Bangladesh Bank report it is found the first mobile bank DBBL Mobile Bank has 172000 customers, bKash has 237000 customers and from others Mercantile Bank is close to DBBL mobile bank and bKash with 1392 numbers of customers (http://www.cgap.org). In Bangladesh Mobile Banking is growing in a high speed. The amount of transaction through this service in each month is 1000 core taka and in each day around 33 core taka. In per month the volume of transaction is increasing by 15 percent (The Independent, October 3, 2011). Under the service, any mobile handset with subscription to any of the six existing mobile operators of Bangladesh would be able to utilize the service. Under the mobile banking services, bank-nominated ‘Agents’ perform banking activities on behalf of the banks, like opening mobile banking account, providing cash services (receipts and payments) and dealing with small credits. Cash withdrawal from a mobile account can also be done from an ATM validating each transaction by ‘mobile phone & PIN’ instead of ‘card & PIN’. Other services that are being delivered through mobile banking system are person-to-person (e.g. fund transfer), person-to-business (e.g. merchant payment, utility bill payment), business-to-person (e.g. salary/commission disbursement), government-to-person (disbursement of government
allowance) transactions.
bKash Limited
bKash Limited is a subsidiary of Brac Bank. It is a joint venture organization between Money in Motion, LLC, USA and Brac Bank Limited Bangladesh (http://www.bkash.com). Its mission is to provide affordable, convenient and reliable financial service towards the customers. Its
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technology platform is Fundamo (visa) (https://www.bangladesh-bank.org). It also has the Full Mobile Financial Service permission. bKash’s mobile network partners are Robi, Grammen Phone and Banglalink. It is the only the mobile financial service prodiver which has one service menu for all the operators. In a short period of time bKash will reach to an agreement with Airtel. It has in total 22,000 agents all over the country. Still now it has the highest numbers of agents in Bangladesh. bKash Limited is giving the service of cash in, cash out, send money (P2P) and payment (payment through organization or in shop). It is offering free registration and also free balance, statement check and changing PIN offer. Rather than the authorized agents it is also available in all Robi WICs, Brac channel and Continental Courier channel. It’s highest amount of daily transaction limit is 1,25,000 Taka and highest amount of monthly transaction limit is 2,50,000 Taka. Also its monthly highest P2P transaction limit is 25,000 taka. Still now, bKash is the most visible mobile bank in Bangladesh. It is running heavy advertising from the beginning. It is running its marketing through TV advertisement, Radio advertisement, billboard, Poster, festoon, leaflet, shop pointer etc.(Internal Document, 2013).
Mission of bKash Limited
By providing financial services that are convenient, affordable and reliable, bKash aims to widen the net of financial inclusion. bKash wants to provide a solution for Mobile Financial Services, built on a highly scalable Mobile Money platform, allowing the people of Bangladesh to safely send and receive money via mobile devices.
Product and services
bKash is dedicated to provide financial services through an extensive network of communitybased agents and existing technology, including mobile phones. The overall value proposition is simple: a safe, fast & convenient way to send and receive money, make payments anytime anywhere and store or safekeeping of your hard earned money. bKash is a Payment System Operator (PSO) License holder, and is regulated by the Bangladesh Bank. bKash maintains proper documentation to follow Money Laundering Prevention Act 2009, Anti-Terrorism Act 2009 and Bangladesh Bank‟s Guidelines on Mobile Financial Services (MFS) for Banks 2011, where applicable.
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Cash in
You need to have money stored in your bKash wallet to avail the services. So, before doing any transaction, make sure you have sufficient balance in your wallet. For putting money in your wallet, follow the steps below 1. Go to any bKash agent 2. Let him know the amount you want to Cash In 3. Write down your wallet number and the Cash In amount in Agent register 4. Pay the amount of money you want to cash in 5. In exchange, the agent will send bKash money to your wallet. Cash In done! 6. You and the agent both will get confirmation message. Remember to put your signature in the agent register before leaving the counter
Cash out
If you have sufficient credit in your bKash wallet, you can withdraw cash anytime from anywhere. To Cash Out from your wallet1. Go to any bKash agent 2. Let him know the amount you want to cash out 3. Write down your wallet number & the amount in Agent register 4. Dial *247# on your mobile for bKash menu 5. Choose “Cash Out” 6. Choose “From Agent” 7. Enter Agent‟s wallet number (ask the agent) 8. Enter the amount 9. Enter your wallet PIN 10. Done! You and the Agent both will receive confirmation message. Count the amount and put your signature in Agent register before leaving the counter
Send money
Send Money enables you to transfer money to other's wallet. Follow the steps below 1. Go to bKash Menu by dialing *247#
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2. Choose 'Send Money' 3. Enter the wallet number you want to send money to 4. Enter the amount you want to send 5. Enter a reference about the transaction. Do not use more than one word, avoid space or special characters 6. Now enter your wallet PIN to confirm the transaction 7. Done! You and the Receiver both will receive confirmation message
Payment
Customer can make payment from his own wallet to any small or big business entity who accepts bKash. For example, if you want to pay after shopping, use the following steps1. Go to bKash Menu by dialing *247# 2. Choose 'Payment' 3. Enter the business wallet number you want to pay to 4. Enter the amount you want to pay 5. Enter a reference against your payment (you can mention the purpose of the transaction in one word. Ex: Bill) 6. Enter the counter number (the salesperson at the counter will tell you the number) 7. Now enter your PIN to confirm 8. Done! You will get a confirmation SMS
Benefits of using bKash Limited
Fast bKash is dedicated to widening the net of financial inclusion among the people of Bangladesh by facilitating money transfer through mobile phones. bKash provides Mobile Financial Services allowing customers to send, receive, and pay money from their mobile phones. Affordable Send and receive money with minimal effort and cost. bKash provides the highest benefits to its customers at an affordable cost, enabling everyone to access the formal financial system of the economy. In addition to eliminating initial monetary costs involved in entering the banking system, bKash greatly minimizes opportunity costs such as time and effort required to access such services.
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The service charges are minimal and there are no hidden costs involved. Open a bKash Account on your own mobile and experience how bKash saves unexpected and incidental costs for you. Secure Money in your bKash Account won't be lost even if you lose your mobile phone. Every transaction is protected by your very own PIN and what's more, state-of-the-art technology provided by VISA ensures that your money is always safe and secure in our system. Your PIN is your Personal Identification Number that you create when you register for bKash. Each transaction you make needs to be authorized by entering your PIN. To ensure 100% safety of your own account, do not share your PIN with anyone. bKash places a high priority on protecting your information to assure that your transactions and data are secure with bKash. Our security and compliance practices are regularly audited to ensure that they meet the highest standards Convenient bKash users enjoy increased convenience of accessing their finances from their own mobile phones anytime, anywhere. bKash gives you the flexibility to perform transactions 24 hours a day, 7 days a week, regardless of time and place. "No queues no waiting"; the most convenient way of transferring money. Be it on a bus, train, launch, or anywhere else; as long as you have a bKash Account on your mobile phone, you can access your account and send or receive money in seconds. The bKash interface also uses a very easy and simple instruction based USSD channel. Nationwide bKash is the easiest and safest way to send or receive money instantly on your mobile, nationwide. No matter where you are in Bangladesh, bKash is always with you. Our extensive distribution network with more than 60,000 Agents covering each district and Thana along with around 300 BRAC Bank ATMs provides you with the nationwide reach and capacity that you need to avail bKash services at a close proximity. The service is supported by mobile networks of all the leading MNOs which enables you to access your bKash Account even from the remotest areas of Bangladesh.
Findings and Analysis
After going through the details of bKash Limited I find out few major issues in which they can improve their service. Those are:
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Cost
bKash Mobile banking is allowed to access banking facilities at affordable cost. A positive aspect of mobile phones is that mobile networks can reach remote areas at lowest cost. But in reality they didn’t cut any annual charge but per transaction you need to pay 2% service charge. If your transaction amount is small than it is ok. But if you want to transfer large amount like 1 lac then it will cost you more than traditional banking. Another problem is that when you cash in to your bKash account which is similar to deposit you also need to pay charge unlike traditional bank.
Trust worthy
One can trust mobile banking as traditional banking system. It has secured PIN (Personal Identification Number) code which is known by the user, and also has a check digit. But in Bangladesh traditional branch based banking remains the most widely adopted method of conducting banking transaction. The poor often have greater familiarity and trust with mobile phone companies than formal banking institutions. Furthermore a mobile handset can easily be adapted to handle banking transactions. But it is not commonly known by all. They customer may trust bKash and mobile operator but they have difficulties in trusting the agent with whom they deal with.
Opinion about time saving
Mobile banking, a real time on-line banking service is available anytime, anywhere throughout the country. So it can save one’s time. People have not to wait by standing in a long line so it takes less time than traditional banking. But some people think it higher time consuming and some people think it takes same time as traditional banking. The job processing time is shorter than traditional banking but taking job order takes much time due negligence of agent or problem in the mobile message server.
Interest in Mobile Banking
Mobile banking is a new technology in Bangladesh, started from 31st March 2011. bKash is providing the service as a substitute of branch banking. One thing that lack here is bKash won’t give you interest on your savings. This may drive people to rely on traditional banking.
Convenience
Mobile banking using system is very easy to use. Poor people are often not considered valuable customers by the formal financial sector as their transaction sizes are small, and many live
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in remote areas beyond the reach of banks branch networks. Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. So, mobile banking system develops to bring poor people into banking system. Instead of paying your electricity bill through bank you can now directly send it from mobile via bKash which is really convenient but again sometimes technical difficulties hinders convenience.
Infrastructure support
M-banking is beset with several infrastructural and institutional constraints such as inadequate availability of reliable and secure telecommunication infrastructure, absence of a backbone network, poor ICT penetration in the banking sector, lack of skilled manpower and training facilities. bKash has advanced IT support to run its business but the problem is in IT infrastructure of Bangladesh.
Security
The growth in m-banking services not only depends on technological advances, but also on consumer confidence in the provided services; therefore, legal certainty must be established. On the other hand as people carry the mobile device with them, it is very easy to hijack and transfer the deposited amount to hijacker mobile account. So, in the current legal environment most of the people do not feel comfort and secure to deposit enough in mobile account.
Regulatory constraints
Absence of supportive policies, guidelines, rules and regulations relating to e-transactions are barrier to development in m-banking Brac Bank Ltd. introduced mobile banking product named bkash along with Dutch Bangla Bank and Trust Bank Limited. But till now no interbank transaction guideline or regulation policy established among those. So, it’s not possible to avail the m-banking facilities of bkash through DBBL or TBL. As no supportive m-transaction policy is available it’s very easy to involve in money laundering activities.
Problem in Money Transfer
A phone call or a text message can make payments and money transfers. Customers are able to receive electronic money into their bKash accounts through salary, loan, domestic remittance, and other disbursements. They also can cash out the electronic money at any of the hundreds of agents assigned by bKash. Agents and users of mobile financial service provider bKash have been facing trouble in money transfer for the last few weeks. We're carrying out maintenance work that has
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created temporary sufferings,” Kamal Quadir, chief executive officer of bKash replied against the complaint. Quadir, however, claimed 95 percent of the users are getting bKash services properly. We are facing trouble for the past eight days. The problem becomes acute during the daytime, but remains better at night (12-7am) when customer turnout is scarce,” said Sadequr Rahman, owner of Channel Enterprise, a distributor of bKash in Gulshan. It event become a new in the newspaper named news priyo on 20/09/2012.
Mobile Banking Fraud
bKash is accused of fraud mostly because of its dealer. According to financial express August 05, 2013 out of 500 transaction 1 is fraud. a senior Rab official saying that 10-12 cases of extortion using mobile banking services are reported every day. Let us also consider the point that not all cases are reported, and assume that on average 25% of the actual cases are indeed reported. So, we are looking at about 50 occurrences of these fraudulent activities per day.
SWOT Analysis
To find out the viability of a particular product we may perform a SWOT Analysis of the product. This will analyze the Strengths, Weaknesses, Opportunities and Challenges of the bKash Limited. For analyzing the performance of bKash limited the SWOT Analysis is considered. Strengths Mobile Banking is new in our economy. Only a few banks are now offering this service. Through Internet Banking Most of the banks are offering only balance information. Actual fund Transfer and fund disbursement is not possible in all the banks that are offering internet banking Services. Even though Dutch Bangla Bank started earlier but they couldn’t enjoy first mover advantages as bKash came with a boom. Its promotion strategy make it popular and its service is also flexible. Another strength of bKash is its wide network of agents available along every streets. Good IT Support and user friendly. Weakness The system will have a problem with the identification of the individual who is initiating the transaction. In Bangladesh, the identification of an individual is not yet supported digitally. So there may be a problem in moving toward mobile banking era. Another weakness is their agent are independent so often they charge higher prise than listed. There are also complains
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that they intentionally delay the service. Poor telecommunication Infrastructure often delay the system as their mobile system go down so agent can’t send the money at right time. Opportunities Non-branch banking is becoming popular in our country. Many banks are now offering nonbranch banking facilities. A person can withdraw or deposit money in any branch of the bank he has account with. So moving to mobile banking will allow the banks to offer non-branch banking facilities. Mobile device is becoming very common to us. So a service offered through the mobile phone will be widely accepted in the near future. Moreover bKash has created high customer value in future which will help them to get more customers. Threat People have concern about security and privacy. They like to feel their money with their hand. They actually don’t believe in virtual money transfer. Furthermore a mobile handset may not easily be operated to handle banking transactions as most of our people do not have sound technological knowledge. Their IT may be absolute over time as it is technology based company.
Conclusions
Mobile banking using system is most convenient financial service. Majority of our people live below poverty line and often not considered valuable customers by the formal financial sector as their transaction sizes are small, and many live in remote areas beyond the reach of banks branch networks. On the other hand Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. Mobile banking system develops to bring poor people into banking system. Majority of our target customers are satisfied with our service as it is faster, convenient, secure, affordable and nationwide network. bKash is the Pioneer in mobile banking system and I expect they will be able to hold the top position in near future by overcoming the complaint that raise against bKash Limited.
Recommendations
Control and monitor agent:
bKash limited is doing mobile banking through agents who played important role in customer service. bKash should arrange seminar, meeting or training facility to those agent so that they
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can give better service. They also need to give them incentive so that they give better service. Normally bKash agent not only do bKash they provide a lot of service in a same shop with single person. Make sure that agent should give priority to bKash service.
Increase service awareness:
bKash is technology based mobile banking and many customer may not be aware to use those system. So bKash should make some demo how to get their service and put them in their website, tv, newspaper, youtube etc.
Branding your service:
Every financial institution trust is must to earn which can be earned by branding. bKash as a new brand and it should create customer value by giving better service and removing fraud from their service by following money laundering act. they can also engage is CSR activities to enhance their brand value.
Lowering Charge:
bKash should have incremental service charge policy higher the amount lower the charge which will give them more bulk transaction and more money. Their cash in service shouldn’t be charged.
Act as a substitute as branch banking not as a support organization:
bkash is a substitute of branch banking so they should move forward and try to give full fledged banking service in one umbrella, they can give interest on average bKash balance which will motivate poor people to save money.
Continuous development in infrastructure
bKash should continuously improve their service to remain in the challenging mobile banking sector and also to improve their service experience. Recently there is lot of problem send and receiving money through bKash due to infrastructure problem and bKash should consider this problem. They also need to give the complaint customer different gift coupon due to technical difficulties which will help them to retain their customers.
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References
Amin, k. (September). “bKash users face trouble in mobile money transfer”. Priyo News Friedman, Thomas (November 2, 2010). "Do Believe the Hype". New York Times Goyal, V., Pandey, U.S. and Batra, S. (2012). Mobile Banking in India: Practices, Challenges and Security Issues. International Journal of Advanced Trends in Computer Science and Engineering.Volume 1, No.2 Islam, P. (August 05, 2013). “Mobile Banking Fraud”. The Daily Star Kabir, S. A. H.,Sakib, M., Sazzad, A., Shahnaz, C.and Fattah, S. (2010). A secured electronic transaction scheme for mobile banking Bangladesh incorporating digital watermarking, Information Theory and Information Security (ICITIS), IEEE International Conference on, pp. 98-102 Klein, M. and Mayer, C. (2011).Mobile Banking and Financial Inclusion. The Regulatory lessons. Laukkanen, T., Lauronen, J., 2005 Consumer value creation in mobile banking services. International Journal of Mobile Communications, Vol 3 (4) Mousa, A.T., Rizik, A.., Doaa, Q. (2011) Innovative Secure Mobile Banking Services. p.195. Rose, P.S. & Hudgins, S. C. (2005), Bank Management & Financial Services, 6th edition, McGraw Hill International Edition. Saha, S. (June 11, 2013). “Mobile banking carving a niche”. The Daily Star Sultana, R. (2009),” Mobile banking: Overview of Regulatory framework in emerging markets, pp.24-131. Scornavacca, E., Hoehle, H. (2006). "Mobile Banking in Germany," Proceedings of Helsinki Mobility Roundtable.Sprouts: Working Papers on Information Systems, 6(28). Tiwari, R. and Buse, S. (2007). The Mobile Commerce Prospects: A Strategy Opportunities in the Banking Sector. Hamburg: Hamburg University Press.
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Appendices
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Partners of bKash Limited
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Summary ....................................................................................................................................................... 2 Introduction .................................................................................................................................................. 3 Mobile Banking ............................................................................................................................................. 4 Mobile Banking across the globe .................................................................................................................. 5 Infrastructure for Mobile Banking ................................................................................................................ 6 Future of Mobile Banking ............................................................................................................................. 7 Mobile Banking in Bangladesh ...................................................................................................................... 7 bKash Limited ................................................................................................................................................ 8 Mission of bKash Limited .............................................................................................................................. 9 Product and services ..................................................................................................................................... 9 Benefits of using bKash Limited .................................................................................................................. 11 Findings and Analysis .................................................................................................................................. 12 SWOT Analysis............................................................................................................................................. 15 Conclusions ................................................................................................................................................. 16 Recommendations ...................................................................................................................................... 16 References .................................................................................................................................................. 18 Appendices.................................................................................................................................................. 19
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Summary
Mobile banking is gaining ground among the people in Bangladesh within a short span of time for facilitating its easy transaction services. Mobile Banking or m-banking is a substitute of general banking system. In this system all the banking procedure has been complete through the mobile device. Mobile Banking is widely using for the transaction of money in different parts of world. The procedure of mobile banking is implemented mainly through three different technological solutions, these are browser-based, applications, messaging- based application and client based applications. The government along with the country's central bank, is giving a greater focus now than ever before on supportive efforts to bring a large number of people under the banking channel by using mobile banking service as only a quarter of the country's population has now access to the formal banking sector. Poverty and lack of education and awareness are the main obstacles, preventing an estimated 60% of the population from having access to financial services, according to the latest annual report of the BB so without any doubt mobile banking can be an effective substitution for branch banking here. The Brac Bank-initiated mobile banking service, 'bKash', is at present the country's leading service-provider in mobile banking. There are, in all, 16 such service-providers, all of them being in the banking sector. bKash Limited is the market leader in the mobile banking sector of Bangladesh until now as it is affiliated by Brac Bank and its media exposure. Mass population aware of bKash and treated its service as sending money quickly and safely without muck paperwork. bKash took the first mover advantages in mobile banking. In this paper I am going to talk about bKash operation in Bangladesh, their objective, how they run business, what are the opportunities and challenges they are facing. I try to identify the core problem of bKash Service and try to give solution to overcome those problems and carry their business successfully. Mobile banking is untapped market and bKash has grab that market and there is a huge demand for this service and logically it should work well in Bangladesh as it worked in the nearby countries. But there is some drawbacks as people find it unreliable and unsafe and there is also allegations against some agents making delays deliberately to send money to the customers for their cash withdrawal in time and taking extra charge over the listed rate. bKash should monitor their agents properly through their network and ensure better customer service to retain their first mover advantages.
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Introduction
Importance of banking system in a developing country increases rapidly because of fast economic growth. It is quite impossible for any country to develop in industrial and commercial sector without sound banking system in moder n economic era. General Banking and Mobile Banking is one of the significant functions of the bank. Mobile Banking is widely used for the transaction of money in different parts of country. The procedure of mobile banking is implemented mainly through three
different technological solutions, these are browser -based, applications, messagingbased application and client based applications. (Tiwari and Buse, 2007). The browserbased application is essentially a Wireless Access Protocol (WAP)-based internet access. This requires a compatible mobile phone which is WAP-enabled. The mobile phone is used to access banking portals through the Internet. On the messaging-based applications, the communication between the bank and the customer is carried out via text messages. For example, by using a registered mobile number, the customer sends a predefined command to the bank then uses text messages to conduct transactions with the bank. An example of messaging-based applications is the Unstructured Supplementary Service Data (USSD), which has compatibility with most mobile phones. The massive improvement of technologies around the world brings an opportunity to improve the technological platform of banking sector. The goal of the extending service of banks with improve technology is to satisfy the desire of customers. One of the extending services with modern technological advancement is Mobile Banking. In this process of banking customer are allowed to access into the banking system in anytime from anywhere. The requirements for this process are to have a mobile device and mobile network connection (Al-Akhras and Qwasmi, 2011). The core benefit of this mobile banking is to reach to the people who do not have the access in internet banking or in normal banking procedure. It is mostly helpful for the people of remote areas (Laukkanen and Lauronen, 2005). According to Raseda Sultana, millions of people across the developing nations are relying on informal economic activities for their living and most of these people are from the bottom stage of the pyramid. These mass populations do not have the access into the basic financial services or the regular banking system. This mobile banking brings the opportunity for these people to get the banking facility. Now the reason why “mobile banking” is getting greater emphasize because
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more there are than 4 billion mobile subscribers who represent 61% population of world. So it is the best way to reach among the biggest portion of world population (Sultana, 2009). Also, mobile banking needs less processing than general banking process. It helps the banks to reduce cost, requires less storage facility (Rose and Hudgins, 2005). Mobile Banking is also better process among all the other e-banking process. In internet banking there has the higher risk then mobile banking due to hacking system. Also to use internet banking people needs extra skills to use computer. On the other hand, to use Mobile Bank, customers’ needs to have the basic idea about how to operate mobile in daily life. So to use this mobile banking a great level of awareness is not needed to create. It is said that mobile banking is one of the best thing ever happened in the personal finance management. Through this process customers will keep them attached with the banking system all the time. This mobile banking is still in growing business. In some countries mobile banking is become very much popular while in some countries it is just in the beginning stage.
Mobile Banking
Mobile Banking is a term that is now a buzzword in the modern business world. Mobile banking generally refers to financial services delivered via mobile network and performed on a mobile phone. It is now a burning issue in the financial service. According to a news report in ‘The Daily Star” published in June 11, 2013 On average, Tk.125 crore changes hands through mobile
banking. It is a systematic set of process that enable bank customers to have bank services through
mobile phone starting from simple mobile handset Personal Digital Assistant (PDA) . Now a days mobile banking has increasingly become a necessary component of business strategy. For economic development. Due to immense advances of information and communication technology, mobile phone reached every corners of the world. It provide some attractive features for the customers than those offered by traditional banking system such as to open a bank account, depositing, withdrawing. Balance transferring and it takes less time than traditional banking system. In case of traditional banking system a fund transfer for instance used to take several days where as online banking made it possible to complete the same task within moments without incurring any cost. Online banking has one major problem which is customer needs to connected with online but mobile ban king has removed this barrier. Mobile Banking allows us to do things
quicker, cheaper, more efficiently, and with fewer people. Although mobile banking has open a
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new dimension in banking service as it is called banking in your hand but it has some limitation as many consider it as unsecured banking.
Mobile Banking across the globe
Mobile banking is used in many parts of the world with little or no infrastructure, especially remote and rural areas. This aspect of mobile commerce is also popular in countries where most of their population is unbanked. In most of these places, banks can only be found in big cities, and customers have to travel hundreds of miles to the nearest bank. Mobile Banking first introduced in 2001. From 2001 to 2006 there were only 10 Mobile Banks were in world. In 2009 it increased up to 25, in 2010 it increased up to 38 and in the middle of 2011 this number of mobile bank increased up to 50. Surprising by the end of 2011 this number reached up to 140 m-commerce organizations. The major m-commerce boom has happened in African region following by Asian countries (Mayer and Klein, 2011). In African Nations, different mobile companies are coming with the m-commerce business. Orange mobile company is running an m-commerce business with brand name of Orange Money mobile banking. They are running this business in Mali, Senegal, Madagascar, Kenya, Ivory Coast and Niger. Since 2008 they have signed up 1 million people. Though there are multiple mobile banks are working in African nations but the real impact has been made by M-Pesa. M-Pesa is a mobile bank which is a subsidiary of Vodafone. Only in Kenya, M-Pesa register more than 13 million customer, while in Tanzania, M-Pesa has 6 Million customers and in 2010 in total 670 million transactions generated through this mobile banking service. In Latin America potion Telefonica is giving the service of mobile banking in four countries. Among those countries in Brazil, mobile banking is establishing its place in good speed. It is believed that after Africa, Latin America is the place where mobile bank will have greater success. In Latin America only 35 percent people have bank account while 90 percent people have mobile phones. In northern American side, in USA almost 20% people are using mobile banking service in regular purpose. In Asian side mobile banking is also on the way of success. In Pakistan, where are only 14% regular banking subscribers in there already 500,000 customers are already subscribed with mobile banking (http://www.thecitizen.co.tz). In India till now 77 banks have received the approval for mobile banking (http://www.rbi.org.in). Friedman, Thomas (November 2, 2010) try to give an overview of mobile bank usage in India and Pakistan. Telenor Pakistan has also launched a mobile
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banking solution, in coordination with Taameer Bank, under the label Easy Paisa, which was begun in Q4 2009. Eko India Financial Services, the business correspondent of State Bank of India (SBI) and ICICI Bank, provides bank accounts, deposit, withdrawal and remittance services, microinsurance, and micro-finance facilities to its customers (nearly 80% of whom are migrants or the unbanked section of the population) through mobile banking. This mobile banking is also successful in South Korea, Japan, China and Malaysia. In Japan, there are already more than 1.5 million active mobile banking users and it is increasing (Goyal, Pandey and Batra, 2012). Maldives and Bangladesh are also joining in this race. Dutch Bangla Bank launched the very first mobile banking service in Bangladesh on 31 March 2011. This service is launched with ‘Agent’ and ‘Network’ support from mobile operators, Banglalink and Citycell. Sybase 365, a subsidiary of Sybase, Inc. has provided software solution with their local partner Neurosoft Technologies Ltd. There are around 160 million people in Bangladesh, of which, only 13 per cent have bank accounts. With this solution, Dutch-Bangla Bank can now reach out to the rural and unbanked population, of which, 45 per cent are mobile phone users. Though mobile banking have a greater success in world-wide it is not seen the success in the European region yet. It’s already failed in Spain, Austria and some Scandinavian countries. In Germany, in 2003 there were 22 banks were giving mobile banking service but in 2006 it reduced into 14. It is believed that after the establishment of 3G service in all over the Europe, then mobile banking may have success in Europe (Scornvacca and Hoehle, 2006).
Infrastructure for Mobile Banking
Mobile Banking service can be provided in two different processes. One of these are Banks can directly give the mobile banking service towards the customer. In this process banks are having their own network system. On the other hand, in other process banks are using the 3rd party for giving this mobile banking service. In this process banks are having only the database system and the service providing duty is relying on the 3rd party (Goyal, Pandey and Batra, 2012). Now, based on these services providing process, service can be delivered in two different ways. These are application based (GPRS protocol) and the other one is SMS based. In most of the countries especially in the developing countries, SMS based mobile banking is using widely. It requires very low cost and low bandwidth and also it is easy to understand (Kabir, Sakib, Sazzad, Shahnaz and Fattah, 2010).
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Future of Mobile Banking
Based on the 'International Review of Business Research Papers' from World business Institute, Australia, following are the key functional trends possible in world of Mobile Banking.With the advent of technology and increasing use of smartphone and tablet based devices, the use of Mobile Banking functionality would enable customer connect across entire customer life cycle. With this scenario, current mobile banking objectives of say building relationships, reducing cost, achieving new revenue stream will transform to enable new objectives targeting higher level goals such as building brand of the banking organization. Emerging technology and functionalities would enable to create new ways of lead generation, prospecting as well as developing deep customer relationship and mobile banking world would achieve superior customer experience with bidirectional communications. Among digital channels, mobile banking is a clear IT investment priority in 2013 as retail banks attempt to capitalize on the features unique to mobile, such as location-based services.
Mobile Banking in Bangladesh
Bangladesh is 8th largest populated country in the world with around 161 million populations. In Bangladesh, almost 31.5% populations are living under poverty (https://www.cia.gov). From this huge population only 13% people have bank account. On the other hand, there are almost 90 million mobile phone subscribers in Bangladesh among them 45% are from rural areas (The Financial Express,6 June 2012).From the point of view of Bangladesh, the expansion of e-banking is opposed by the problem of institutional, infrastructure and regulatory problems. Absence of central networking system, unskilled people and absence of proper policies are lacking behind the whole system. Bangladesh Bank is developing country’s payment system but by that time all the banks are not able to improve their ICT system. In this scenario, it’s hard to reach to mass people with current banking system. From this plot, the concept of mobile banking emerged to reach the banking facility to the unbanked people. People also take this system as good one as 69% people believe this “mobile banking” has prospect in Bangladesh (Ahmed, Rayhan, Islam and Mahjabin, 2011). Mobile banking is a new banking concept in Bangladesh. Bangladesh Bank is influencing banks to operate this mobile in a serious manner to reach to the unbanked people of Bangladesh. Bangladesh Bank believes that mobile is the easiest way to reach to the rural part of the country
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with the banking service. Still now, Bangladesh Bank has given license to 23 banks (See Appendix, Table 1) to run this mobile banking operation. Among these, 14 banks have full Mobile Financial Service permission and other 9 banks have the permission for international remittance transaction only through mobile. According to a published article on “The Financial Express” on 08 March 2013, Some 3.0 million people make now the use of different services under mobile banking. There are about 70,000 outlets of mobile banking service-providers, making the services available to the users. The extent of such services and the volume of transactions involve a sizeable amount of money, between Tk 300 million and Tk 350 million, per day, according to the data of the Bangladesh Bank (BB). Bangladesh Bank issued a guideline name “Mobile Financial Services for Banks”. This guideline is working as a clear direction for those banks. From Bangladesh Bank report it is found the first mobile bank DBBL Mobile Bank has 172000 customers, bKash has 237000 customers and from others Mercantile Bank is close to DBBL mobile bank and bKash with 1392 numbers of customers (http://www.cgap.org). In Bangladesh Mobile Banking is growing in a high speed. The amount of transaction through this service in each month is 1000 core taka and in each day around 33 core taka. In per month the volume of transaction is increasing by 15 percent (The Independent, October 3, 2011). Under the service, any mobile handset with subscription to any of the six existing mobile operators of Bangladesh would be able to utilize the service. Under the mobile banking services, bank-nominated ‘Agents’ perform banking activities on behalf of the banks, like opening mobile banking account, providing cash services (receipts and payments) and dealing with small credits. Cash withdrawal from a mobile account can also be done from an ATM validating each transaction by ‘mobile phone & PIN’ instead of ‘card & PIN’. Other services that are being delivered through mobile banking system are person-to-person (e.g. fund transfer), person-to-business (e.g. merchant payment, utility bill payment), business-to-person (e.g. salary/commission disbursement), government-to-person (disbursement of government
allowance) transactions.
bKash Limited
bKash Limited is a subsidiary of Brac Bank. It is a joint venture organization between Money in Motion, LLC, USA and Brac Bank Limited Bangladesh (http://www.bkash.com). Its mission is to provide affordable, convenient and reliable financial service towards the customers. Its
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technology platform is Fundamo (visa) (https://www.bangladesh-bank.org). It also has the Full Mobile Financial Service permission. bKash’s mobile network partners are Robi, Grammen Phone and Banglalink. It is the only the mobile financial service prodiver which has one service menu for all the operators. In a short period of time bKash will reach to an agreement with Airtel. It has in total 22,000 agents all over the country. Still now it has the highest numbers of agents in Bangladesh. bKash Limited is giving the service of cash in, cash out, send money (P2P) and payment (payment through organization or in shop). It is offering free registration and also free balance, statement check and changing PIN offer. Rather than the authorized agents it is also available in all Robi WICs, Brac channel and Continental Courier channel. It’s highest amount of daily transaction limit is 1,25,000 Taka and highest amount of monthly transaction limit is 2,50,000 Taka. Also its monthly highest P2P transaction limit is 25,000 taka. Still now, bKash is the most visible mobile bank in Bangladesh. It is running heavy advertising from the beginning. It is running its marketing through TV advertisement, Radio advertisement, billboard, Poster, festoon, leaflet, shop pointer etc.(Internal Document, 2013).
Mission of bKash Limited
By providing financial services that are convenient, affordable and reliable, bKash aims to widen the net of financial inclusion. bKash wants to provide a solution for Mobile Financial Services, built on a highly scalable Mobile Money platform, allowing the people of Bangladesh to safely send and receive money via mobile devices.
Product and services
bKash is dedicated to provide financial services through an extensive network of communitybased agents and existing technology, including mobile phones. The overall value proposition is simple: a safe, fast & convenient way to send and receive money, make payments anytime anywhere and store or safekeeping of your hard earned money. bKash is a Payment System Operator (PSO) License holder, and is regulated by the Bangladesh Bank. bKash maintains proper documentation to follow Money Laundering Prevention Act 2009, Anti-Terrorism Act 2009 and Bangladesh Bank‟s Guidelines on Mobile Financial Services (MFS) for Banks 2011, where applicable.
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Cash in
You need to have money stored in your bKash wallet to avail the services. So, before doing any transaction, make sure you have sufficient balance in your wallet. For putting money in your wallet, follow the steps below 1. Go to any bKash agent 2. Let him know the amount you want to Cash In 3. Write down your wallet number and the Cash In amount in Agent register 4. Pay the amount of money you want to cash in 5. In exchange, the agent will send bKash money to your wallet. Cash In done! 6. You and the agent both will get confirmation message. Remember to put your signature in the agent register before leaving the counter
Cash out
If you have sufficient credit in your bKash wallet, you can withdraw cash anytime from anywhere. To Cash Out from your wallet1. Go to any bKash agent 2. Let him know the amount you want to cash out 3. Write down your wallet number & the amount in Agent register 4. Dial *247# on your mobile for bKash menu 5. Choose “Cash Out” 6. Choose “From Agent” 7. Enter Agent‟s wallet number (ask the agent) 8. Enter the amount 9. Enter your wallet PIN 10. Done! You and the Agent both will receive confirmation message. Count the amount and put your signature in Agent register before leaving the counter
Send money
Send Money enables you to transfer money to other's wallet. Follow the steps below 1. Go to bKash Menu by dialing *247#
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2. Choose 'Send Money' 3. Enter the wallet number you want to send money to 4. Enter the amount you want to send 5. Enter a reference about the transaction. Do not use more than one word, avoid space or special characters 6. Now enter your wallet PIN to confirm the transaction 7. Done! You and the Receiver both will receive confirmation message
Payment
Customer can make payment from his own wallet to any small or big business entity who accepts bKash. For example, if you want to pay after shopping, use the following steps1. Go to bKash Menu by dialing *247# 2. Choose 'Payment' 3. Enter the business wallet number you want to pay to 4. Enter the amount you want to pay 5. Enter a reference against your payment (you can mention the purpose of the transaction in one word. Ex: Bill) 6. Enter the counter number (the salesperson at the counter will tell you the number) 7. Now enter your PIN to confirm 8. Done! You will get a confirmation SMS
Benefits of using bKash Limited
Fast bKash is dedicated to widening the net of financial inclusion among the people of Bangladesh by facilitating money transfer through mobile phones. bKash provides Mobile Financial Services allowing customers to send, receive, and pay money from their mobile phones. Affordable Send and receive money with minimal effort and cost. bKash provides the highest benefits to its customers at an affordable cost, enabling everyone to access the formal financial system of the economy. In addition to eliminating initial monetary costs involved in entering the banking system, bKash greatly minimizes opportunity costs such as time and effort required to access such services.
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The service charges are minimal and there are no hidden costs involved. Open a bKash Account on your own mobile and experience how bKash saves unexpected and incidental costs for you. Secure Money in your bKash Account won't be lost even if you lose your mobile phone. Every transaction is protected by your very own PIN and what's more, state-of-the-art technology provided by VISA ensures that your money is always safe and secure in our system. Your PIN is your Personal Identification Number that you create when you register for bKash. Each transaction you make needs to be authorized by entering your PIN. To ensure 100% safety of your own account, do not share your PIN with anyone. bKash places a high priority on protecting your information to assure that your transactions and data are secure with bKash. Our security and compliance practices are regularly audited to ensure that they meet the highest standards Convenient bKash users enjoy increased convenience of accessing their finances from their own mobile phones anytime, anywhere. bKash gives you the flexibility to perform transactions 24 hours a day, 7 days a week, regardless of time and place. "No queues no waiting"; the most convenient way of transferring money. Be it on a bus, train, launch, or anywhere else; as long as you have a bKash Account on your mobile phone, you can access your account and send or receive money in seconds. The bKash interface also uses a very easy and simple instruction based USSD channel. Nationwide bKash is the easiest and safest way to send or receive money instantly on your mobile, nationwide. No matter where you are in Bangladesh, bKash is always with you. Our extensive distribution network with more than 60,000 Agents covering each district and Thana along with around 300 BRAC Bank ATMs provides you with the nationwide reach and capacity that you need to avail bKash services at a close proximity. The service is supported by mobile networks of all the leading MNOs which enables you to access your bKash Account even from the remotest areas of Bangladesh.
Findings and Analysis
After going through the details of bKash Limited I find out few major issues in which they can improve their service. Those are:
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Cost
bKash Mobile banking is allowed to access banking facilities at affordable cost. A positive aspect of mobile phones is that mobile networks can reach remote areas at lowest cost. But in reality they didn’t cut any annual charge but per transaction you need to pay 2% service charge. If your transaction amount is small than it is ok. But if you want to transfer large amount like 1 lac then it will cost you more than traditional banking. Another problem is that when you cash in to your bKash account which is similar to deposit you also need to pay charge unlike traditional bank.
Trust worthy
One can trust mobile banking as traditional banking system. It has secured PIN (Personal Identification Number) code which is known by the user, and also has a check digit. But in Bangladesh traditional branch based banking remains the most widely adopted method of conducting banking transaction. The poor often have greater familiarity and trust with mobile phone companies than formal banking institutions. Furthermore a mobile handset can easily be adapted to handle banking transactions. But it is not commonly known by all. They customer may trust bKash and mobile operator but they have difficulties in trusting the agent with whom they deal with.
Opinion about time saving
Mobile banking, a real time on-line banking service is available anytime, anywhere throughout the country. So it can save one’s time. People have not to wait by standing in a long line so it takes less time than traditional banking. But some people think it higher time consuming and some people think it takes same time as traditional banking. The job processing time is shorter than traditional banking but taking job order takes much time due negligence of agent or problem in the mobile message server.
Interest in Mobile Banking
Mobile banking is a new technology in Bangladesh, started from 31st March 2011. bKash is providing the service as a substitute of branch banking. One thing that lack here is bKash won’t give you interest on your savings. This may drive people to rely on traditional banking.
Convenience
Mobile banking using system is very easy to use. Poor people are often not considered valuable customers by the formal financial sector as their transaction sizes are small, and many live
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in remote areas beyond the reach of banks branch networks. Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. So, mobile banking system develops to bring poor people into banking system. Instead of paying your electricity bill through bank you can now directly send it from mobile via bKash which is really convenient but again sometimes technical difficulties hinders convenience.
Infrastructure support
M-banking is beset with several infrastructural and institutional constraints such as inadequate availability of reliable and secure telecommunication infrastructure, absence of a backbone network, poor ICT penetration in the banking sector, lack of skilled manpower and training facilities. bKash has advanced IT support to run its business but the problem is in IT infrastructure of Bangladesh.
Security
The growth in m-banking services not only depends on technological advances, but also on consumer confidence in the provided services; therefore, legal certainty must be established. On the other hand as people carry the mobile device with them, it is very easy to hijack and transfer the deposited amount to hijacker mobile account. So, in the current legal environment most of the people do not feel comfort and secure to deposit enough in mobile account.
Regulatory constraints
Absence of supportive policies, guidelines, rules and regulations relating to e-transactions are barrier to development in m-banking Brac Bank Ltd. introduced mobile banking product named bkash along with Dutch Bangla Bank and Trust Bank Limited. But till now no interbank transaction guideline or regulation policy established among those. So, it’s not possible to avail the m-banking facilities of bkash through DBBL or TBL. As no supportive m-transaction policy is available it’s very easy to involve in money laundering activities.
Problem in Money Transfer
A phone call or a text message can make payments and money transfers. Customers are able to receive electronic money into their bKash accounts through salary, loan, domestic remittance, and other disbursements. They also can cash out the electronic money at any of the hundreds of agents assigned by bKash. Agents and users of mobile financial service provider bKash have been facing trouble in money transfer for the last few weeks. We're carrying out maintenance work that has
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created temporary sufferings,” Kamal Quadir, chief executive officer of bKash replied against the complaint. Quadir, however, claimed 95 percent of the users are getting bKash services properly. We are facing trouble for the past eight days. The problem becomes acute during the daytime, but remains better at night (12-7am) when customer turnout is scarce,” said Sadequr Rahman, owner of Channel Enterprise, a distributor of bKash in Gulshan. It event become a new in the newspaper named news priyo on 20/09/2012.
Mobile Banking Fraud
bKash is accused of fraud mostly because of its dealer. According to financial express August 05, 2013 out of 500 transaction 1 is fraud. a senior Rab official saying that 10-12 cases of extortion using mobile banking services are reported every day. Let us also consider the point that not all cases are reported, and assume that on average 25% of the actual cases are indeed reported. So, we are looking at about 50 occurrences of these fraudulent activities per day.
SWOT Analysis
To find out the viability of a particular product we may perform a SWOT Analysis of the product. This will analyze the Strengths, Weaknesses, Opportunities and Challenges of the bKash Limited. For analyzing the performance of bKash limited the SWOT Analysis is considered. Strengths Mobile Banking is new in our economy. Only a few banks are now offering this service. Through Internet Banking Most of the banks are offering only balance information. Actual fund Transfer and fund disbursement is not possible in all the banks that are offering internet banking Services. Even though Dutch Bangla Bank started earlier but they couldn’t enjoy first mover advantages as bKash came with a boom. Its promotion strategy make it popular and its service is also flexible. Another strength of bKash is its wide network of agents available along every streets. Good IT Support and user friendly. Weakness The system will have a problem with the identification of the individual who is initiating the transaction. In Bangladesh, the identification of an individual is not yet supported digitally. So there may be a problem in moving toward mobile banking era. Another weakness is their agent are independent so often they charge higher prise than listed. There are also complains
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that they intentionally delay the service. Poor telecommunication Infrastructure often delay the system as their mobile system go down so agent can’t send the money at right time. Opportunities Non-branch banking is becoming popular in our country. Many banks are now offering nonbranch banking facilities. A person can withdraw or deposit money in any branch of the bank he has account with. So moving to mobile banking will allow the banks to offer non-branch banking facilities. Mobile device is becoming very common to us. So a service offered through the mobile phone will be widely accepted in the near future. Moreover bKash has created high customer value in future which will help them to get more customers. Threat People have concern about security and privacy. They like to feel their money with their hand. They actually don’t believe in virtual money transfer. Furthermore a mobile handset may not easily be operated to handle banking transactions as most of our people do not have sound technological knowledge. Their IT may be absolute over time as it is technology based company.
Conclusions
Mobile banking using system is most convenient financial service. Majority of our people live below poverty line and often not considered valuable customers by the formal financial sector as their transaction sizes are small, and many live in remote areas beyond the reach of banks branch networks. On the other hand Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. Mobile banking system develops to bring poor people into banking system. Majority of our target customers are satisfied with our service as it is faster, convenient, secure, affordable and nationwide network. bKash is the Pioneer in mobile banking system and I expect they will be able to hold the top position in near future by overcoming the complaint that raise against bKash Limited.
Recommendations
Control and monitor agent:
bKash limited is doing mobile banking through agents who played important role in customer service. bKash should arrange seminar, meeting or training facility to those agent so that they
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can give better service. They also need to give them incentive so that they give better service. Normally bKash agent not only do bKash they provide a lot of service in a same shop with single person. Make sure that agent should give priority to bKash service.
Increase service awareness:
bKash is technology based mobile banking and many customer may not be aware to use those system. So bKash should make some demo how to get their service and put them in their website, tv, newspaper, youtube etc.
Branding your service:
Every financial institution trust is must to earn which can be earned by branding. bKash as a new brand and it should create customer value by giving better service and removing fraud from their service by following money laundering act. they can also engage is CSR activities to enhance their brand value.
Lowering Charge:
bKash should have incremental service charge policy higher the amount lower the charge which will give them more bulk transaction and more money. Their cash in service shouldn’t be charged.
Act as a substitute as branch banking not as a support organization:
bkash is a substitute of branch banking so they should move forward and try to give full fledged banking service in one umbrella, they can give interest on average bKash balance which will motivate poor people to save money.
Continuous development in infrastructure
bKash should continuously improve their service to remain in the challenging mobile banking sector and also to improve their service experience. Recently there is lot of problem send and receiving money through bKash due to infrastructure problem and bKash should consider this problem. They also need to give the complaint customer different gift coupon due to technical difficulties which will help them to retain their customers.
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References
Amin, k. (September). “bKash users face trouble in mobile money transfer”. Priyo News Friedman, Thomas (November 2, 2010). "Do Believe the Hype". New York Times Goyal, V., Pandey, U.S. and Batra, S. (2012). Mobile Banking in India: Practices, Challenges and Security Issues. International Journal of Advanced Trends in Computer Science and Engineering.Volume 1, No.2 Islam, P. (August 05, 2013). “Mobile Banking Fraud”. The Daily Star Kabir, S. A. H.,Sakib, M., Sazzad, A., Shahnaz, C.and Fattah, S. (2010). A secured electronic transaction scheme for mobile banking Bangladesh incorporating digital watermarking, Information Theory and Information Security (ICITIS), IEEE International Conference on, pp. 98-102 Klein, M. and Mayer, C. (2011).Mobile Banking and Financial Inclusion. The Regulatory lessons. Laukkanen, T., Lauronen, J., 2005 Consumer value creation in mobile banking services. International Journal of Mobile Communications, Vol 3 (4) Mousa, A.T., Rizik, A.., Doaa, Q. (2011) Innovative Secure Mobile Banking Services. p.195. Rose, P.S. & Hudgins, S. C. (2005), Bank Management & Financial Services, 6th edition, McGraw Hill International Edition. Saha, S. (June 11, 2013). “Mobile banking carving a niche”. The Daily Star Sultana, R. (2009),” Mobile banking: Overview of Regulatory framework in emerging markets, pp.24-131. Scornavacca, E., Hoehle, H. (2006). "Mobile Banking in Germany," Proceedings of Helsinki Mobility Roundtable.Sprouts: Working Papers on Information Systems, 6(28). Tiwari, R. and Buse, S. (2007). The Mobile Commerce Prospects: A Strategy Opportunities in the Banking Sector. Hamburg: Hamburg University Press.
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Appendices
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Partners of bKash Limited
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