Digital financial services (DFSs) are rapidly flourishing in parallel with other service sectors as the country is going through a massive technological transformation to achieve the goal of a digital Bangladesh.
Data shows that two popular transaction methods under DFSs -- mobile financial service (MFS) and agent banking— are drawing more and more users to enjoy the services. However, among the two methods, MFS is dominant in terms of the number of users.
As of October, there were 57.8 million MFS subscribers registered with a total of 7,74,892 agents across the country, according to the latest data of Bangladesh Bank.
The central bank data also revealed that the total volume of transactions through MFSs stood at Tk27,633.88 crore in October with an average transaction of Tk891.42 crore per day.
Between January and October this year, the country’s inward remittance through MFSs stood at Tk74.46 crore, and in October alone, it was Tk6.26 crore.
Currently, 18 out of 19 banks, which were given the permission to provide such services, are providing mobile financial services to people across the country. They include Brac Bank, Dutch-Bangla Bank, Trust Bank, United Commercial Bank, Southeast Bank, NCC Bank, Rupali Bank and Islami Bank. BRAC Bank’s bKash and Dutch-Bangla Bank’s Rocket top the list of MFS providers.
Speaking to the Dhaka Tribune, Rajeev Kumar Gupta, programme manager for the Shaping Inclusive Finance Transformations (SHIFT) programme in Asean and Saarc under the United Nations Capital Development Fund, said Bangladesh is doing very well in the field of digital financial services.
“More interventions and services are needed in supply chain like business to consumer space, business to business space, and government to person space. The more people are able to digitize their operations, the more financial inclusion will be possible,” he added.
Shah Md Ahsan Habib, research director at the Bangladesh Institute of Bank Management, said that policymakers should focus on meeting market requirements to promote digital financial services.
He, however, added that ensuring access to internet facilities and availability of mobile phones and devices at affordable costs, and supply of uninterrupted electricity are needed to further improve the services.
“Managing operational risks including fraudulence is another critical barrier. Arrangement of external evaluation, compensation for fraudulence and reduction of costs may help expand the services,” Habib added.
Female MFS users
A recent study titled “Opportunities in the female MFS market in Bangladesh” revealed that the number of female MFS users is almost half their male counterparts.
The International Finance Corporation conducted the study.
Only 27% of women in the country have access to MFSs, compared with 53% of men, the study says, adding that 33% of all adult women in Bangladesh would be registered as MFS users by 2020.
It also identified five major barriers to making mobile financial services available among women.
The barriers include lack of nationwide data on female MFS market, absence of business case to digital wage payments, absence of targeted MFS products, low financial literacy, and limited number of female MFS agents. The study recommended ensuring accessibility, building adequate value propositions, enhancing financial capability of current and potential customers, and developing value proposition for payments to female beneficiaries.
Meanwhile, the government has planned to address constraints that exclude people from full participation in the financial sector.