Impact of Mobile Banking – A case

study of DBBL in Bangladesh

Submitted by – Fahmida Majib (ID - M112306)

Sadia (ID - M )

Israt Jerin (ID – M )

Abantika (ID – M )

AcknowledgementWe are grateful to the Almighty Allah who is the most gracious and kind to give us the

valuable opportunity to work on this assignment in a nice group all together.

We bade our heartiest gratefulness to our honorable course teacher Md. Zahir Raihan,

Assistant Professor, Department of School of Business, Bangladesh Open University for

showing us the right path with correct guidelines and for encouraging us with valuable

suggestions regarding the case study of Impact of Mobile Banking.

We are also very grateful to all of our group members for the valuable co-operation and

hard working efforts to make this final report on the case study.

AbstractMobile banking is one of the most important and very fast technological advancement in

the modern day of civilization. Usually, when the banking and or the concepts of

financial organization has been introduced into the world, people are always looking for

the more creative and fast and mobile banking services and supports. At one stage, by the

shake of scientists and technology lovers and researchers, we have been introduced with

the latest banking solution called mobile banking. As the mobile banking is very much

effective for the rural and remote areas of a country, Bangladesh is not an exception. So

by the hand of Dutch Bangla Bank Ltd. We have been introduced with the latest taste of

mobile banking services at our doorsteps. A case study on DBBL mobile banking, will

help us to understand the challenges to adopt new technologies in fast growing banking

sectors, reasons, impact and the effect on the overall economic growth in Bangladesh

along with it’s process and development.

Table of Contents

1. Introduction ……………………………………………….…………………………… 1

2. Types of Banking …………………...… ……………………………………………… 1

a. General Banking……………………..…………………………………………. 6

b. Electronic Banking ……………………………………………………………… 6

i. Internet Banking …………………………………………...…………… 8

ii. Phone Banking ……………………………………………………….… 8

iii. Mobile Banking ……………………………………...………………… 8

3. Why Mobile Banking has come into the limelight in Bangladesh……………...……… 6

a) Fast Technological Advancement and its use …………………..………………….. 6

b) Limitation of Distance Communications in Rural and Remote areas………………. 6

c) Fast growing mobile Subscribers vs Banking Account Subscribers ………….…… 8

4. How mobile banking works in DBBL …………………………………….…………….. 8

5. Security Holes and Protection ……………………………………….………………… 12

6. DBBL the Forerunner in Bangladesh ………………………………….………………. 13

7. Impact of mobile banking in rural economy…………………………………..……....... 15

8. Reflection of mobile banking in overall economic growth in Bangladesh …………...... 15

9. Social and Legal issues of Mobile Banking ………………………...………………….. 16

10. Summary ………………………………………………………..………………… ……17

1. Introduction

Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system.

The term bank is derived from the French word Banco which means a Bench or Money exchange table. In olden days, European money lenders or money changers used to display (show) coins of different countries in big heaps (quantity) on benches or tables for the purpose of lending or exchanging.

So a bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it.

2. Types of Banking

There are several types of banking. We can define those as actual or conventional banking and electronic banking. And electronic banking can be expressed as phone baking, internet banking, ATM;

And now the present world is using another important banking method is called mobile banking which we will describe more in the later sections of the report.

So now we can express the banking services in two ways –a) General Bankingb) Electronic Banking

a) General Banking

General banking services includes the most common banking services i.e. cash withdrawal or

deposit, money transfer, cheque issue, loan etc. and all these type of services must be done with

the present of the depositor or the back account holder into the respective bank or branch of a

bank.

b) Electronic Banking

There are mainly 3 types of electronic banking is being heavily used in the current world as

mentioned –

i) Online banking or Internet banking

ii) Telephone Banking or Phone Banking

iii) Mobile Banking

Online banking or internet banking means performing all the activities of a bank with itself and

providing the banking services to the customers through the electronic means i.e. using

telecommunication networks, computers and other digital electronic devices.

Tele-banking or telephone banking or phone banking is the banking when the forms of

transaction and it’s confirmation and requests has been delivered and received through the wired

phone or ip telephony. Tele-banking has numerous benefits for both customers and banks. As far

as the customers are concerned, it provides increased convenience, expanded access and

significant time saving. On the other hand, from the banks’ perspective, the costs of delivering

telephone-based services are substantially lower than those of branch based services.

Mobile banking is a way for the customer to perform banking actions on his or her cell phone or

other mobile device. It is a quite popular method of banking that fits in well with a busy,

technologically oriented lifestyle. It might also be referred to as M-banking or SMS banking.

The amount of banking you are able to do on your cell phone varies depending on the banking

institution you use. Some banks offer only the option of text alerts, which are messages sent to

your cell phone that alert you to activity on your account such as deposits, withdrawals, and

ATM or credit card use. This is the most basic type of mobile banking.

A more involved type of mobile banking allows the user to log into his or her account from a cell

phone, and then use the phone to make payments, check balances, transfer money between

accounts, notify the bank of a lost or stolen credit card, stop payment on a check, receive a new

PIN, or view a monthly statement, among other transactions. This type of banking is meant to be

more convenient for the consumer than having to physically go into a bank, log on from their

home computer, or make a phone call. While all of this is true, some are concerned about the

security of mobile banking.

Or in other sense we can also say that, 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.

Also there is another latest banking types already placed into the book of banking history is called mobile

banking. And in Bangladesh, DBBL bank has taken the initiatives to start these services for the first time

of its kind.

3. Why Mobile Banking has come into the limelight in Bangladesh

In Bangladesh, mobile banking has been introduced due to the time expectancy along with fast

growing possibilities. And there are some very strong backgrounds of this introduction of Mobile

banking services in the world especially in Bangladesh. So let’s see what we can get for the

background to be strengthened.

There are 3 key important points of this introduction in Bangladesh

a) Fast Technological Advancement and its use

b) Limitation of Distance Communications in Rural and Remote area

c) Fast growing mobile Subscribers vs Banking Account Subscribers

a) Fast Technological Advancement and its use

Bangladesh is a densely populated country and still in the eye of world bank and or IMF, a

developing country struggling with a lots of problems and challenges. But in the case of the

banking sectors it’s getting more positive air than before just because of some important growth

of the use of technologies like internet, telephone and mobile. What is very important and

interesting, the growth of mobile users rather than the internet users. So if a bank can reach a

services to the doorsteps of mass people using the light weight beloved cell phone, that is going

to be great in hand to hand always for every one. Also it has been noticed that the services of a

Bank usually not always affordable to available for all the types of the people in our country, but

the mobile banking by DBBL has done that. Just a little scenario, a farmer can sell his crops

using the mobile, and receive the money in his mobile bank account instantly and can complete

all the types of the transactions using several go of push button of handheld devices without

reaching to the Bank physically.

b) Limitation of Distance Communications in Rural and Remote area

Bangladesh is such a country which is yet to get the fine tuned network of transportation in all

the areas of the country along with the rural areas and remote areas. So this is one of the major

issue that forcing the bank to introduce the services for the people more conveniently for all class

of people as well. Also central bank can not allow all the banks to open new branches for the

new areas anonymously. And often, the bank does not want to open the new branches for huge

cost investment. But when the mobile banking concept introduces, it has gain the blow to move

on.

c) Fast growing mobile Subscribers Vs Banking Account Subscribers

5. How mobile banking works in DBBL?

Before we discuss about the security issues of Mobile banking we have to understand the technology behind this.

Technologies behind Mobile Banking -

DBBL Mobile Account01234567891 Plus (Check Digit)

Why Check Digit

To eliminate errorSecuritySafe

Why PIN Required for DBBL Mobile Account?

- To verify the A/C owner by the system- PIN is key for transaction of Mobile Banking.- PIN ensures security of customers money and protect fraudulent transactions

Which Mobile No. can be registered? & What type of Mobile set is required? Any mobile number from any Mobile Operator & Any type of mobile set.

Service Provided by DBBL

So Opening of Mobile Accounts in DBBL involves -

Required DocumentsI. KYC Form

II. PhotographIII. Voted ID /

Other photo ID

Now let’s see how the entire process does look when a user come into for his or her entry in mBanking in DBBL.

The typical process of registration for mobile banking in DBBL.

1. Current Coverage – by DBBL

Description -

2. Importance on the overall economic growth

3. Limitation of Mobile Banking

4. Conclusion

Reflection of mobile banking in rural economy