Making mobile financial services safer

Dr. Atiur Rahman
Governor, Bangladesh Bank :
Today mobile money is a global phenomenon but every implementation is a local story. In terms of customer experience, MFS in Bangladesh is no different from a wallet offered by an MNO in some countries. However, there are big differences in regulatory perspective -ours is bank-led model while others in the globe may not be so. Bangladesh has witnessed tremendous growth in MFS which may be seen from the following facts and figures:
All six mobile phone operators are involved with MFS providers in some capacity. By now, 28 Banks have MFS permission and 19 are in active operation that includes BRAC Bank’s dedicated MFS, bKash.
Key players in MFS are bKash, DBBL Mobile Money and M-Cash of IBBL with 13.2 million registered customers with about 2 lacs agents nationwide generating (on average) more than 1.0 million transactions amounting more than Tk. 2.21 billion per day.
One interesting feature of MFS in Bangladesh is that most of the cash-ins are happening in major metro cities while cash-outs are spreading to the rural areas making significant contribution in terms of financial inclusion and there by inclusive growth.
As your survey turns out to be dominated by various forms of OTC transactions, let me highlight some of the features of OTC transactions in Bangladesh:
It is natural that survey at agent points would be dominated by OTC customers.
Unlike other countries, it is not common in Bangladeshi to carry NID-which is hampering adoption of wallet. There is, therefore, a need for awareness campaign of carrying NID and allowing access to NID by mobile bankers. Due to low transaction limit, some find it convenient to send money through OTC.
Not having a handset is a barrier to have an account and there are many who don’t have their own handsets. People without the devise with the need to send/receive money get the job done through OTC.
It has been our observation that-in cash-in markets, customers don’t feel the need to open an account, however, in the cash-out markets, there is a higher need to register and open an account.
This analysis is done based on patterns developed over millions of transactions.
There is a general perception that opening an account is a cumbersome process-which indirectly promotes OTC.
The current form of registration, which doesn’t allow people to instantly open an account, significantly slows the process of financial inclusion-as people want to open accounts on the spot and transfer funds instantly.
Self-wallet-use is increasing as many elements (i.e. airtime, loan repayment, merchant payment, school fee payment) are coming in the ecosystem and, time to time, we should study how the adaptation is increasing.
Greater coordination between regulators, operators, mobile bankers. BFIU will be more active in coming days. New products like savings, merchant payments, bill payments, salary payments, G2P, B2P and P2P payments may be used through MFS for broader banking services.
Interest bearing mobile accounts may be one option to encourage the saving habit of the customer and thus can use their mobile accounts for banking services.