The Continuously Evolving Mobile Banking Industry in Bangladesh

Mobile Banking is a banking process without bank branch which provides financial services to unbanked communities efficiently and at affordable cost. To provide banking and financial services, such as cash-in, cash out, merchant payment, utility payment, salary disbursement, foreign remittance, government allowance disbursement, ATM money withdrawal through mobile technology devices, i.e. Mobile Phone, is called Mobile Banking.

Today Mobile banking has become the lever for financial inclusion in under developed economies such as Bangladesh where of the 160 Mn people present, 87% of them do not have bank accounts. This presents a huge untapped market for commercial banks. But bank branches cannot be established on this scale due to regulatory constraints on obtaining the licences.

This is where mobile banking steps in. About 95% of the population has access to mobile phone services across the country which makes mobile banking the preferred choice for the users.The users can perform all the transactions using the mobile phone and without the need for visiting a bank branch.

Mobile banking was introduced in the country in 2006 with the launch of Billpay by Mobile Network Operator (MNO). Thereafter the central bank has so far approved 26 banks to provide mobile banking while 17 of them have already started the service within a 3 year timeframe. Some of the players include Brac Bank's bKash, DBBL mobile banking, IBBL mCash, the Prime Bank easyCash. These mobile banking services allow the users to deposit, withdraw and transfer money using mobile phones. Some of the services include customer registration, cash deposit, cash withdrawal, merchant payment, utility payment, salary disbursement,foreign remittance, fund transfers etc.

The number of mobile banking users have crossed the 10Mn mark and the volume of transactions stood at $1030 Mn in the first quarter of 2013. On an average a sum of Tk 121.25 crore is transacted a day through mobile banking services.

Going ahead to make the mobile banking services even more widespread, more services such as checking and micro or small credit facilities need to be provided to the existing services which will push the mobile banking services one step forward in the promotion of financial inclusion.