Mcommerce opportunity in bangladesh (mobile banking, next big thing)

Mobile Banking in BangladeshThe Next Big Thing

Population - 160 mn

Mobile User-116.23 mn

MFS user-16.7 mn

The huge mobile penetration makes mobile banking as the biggest alternative financial channel

Only 14.37% of telecom

base

Still there is a potential ready base of 99.53 mn

telecom customers

Active SIM Subscribers

Mobile Subscriber - 116.23 Mn Mobile Penetration - 72%

Actual Mobile Users

Mobile Subscriber - 75.60 MnMobile Penetration - 45%

Telecom Subscription Scenario (2014)

Mobile Operators Market Share (2014)

Bangladesh Telecom Market Scenario

42%

26%

21%

7%3% 1%

GP BL Robi Airtel Teletalk Citycell

35 Million Mobile Internet Subscribers

21% Internet Penetration

3

Barter

Coins

Paper currency

Plastic money

Mobile money

Currency evolution

Mobile Banking Snapshot(June 2014)

Bank with mobile banking license: 28 No of Bank launched the service : 20 No of agent: 0.41 million No of customer: 16.7 million Active customer: 6.7 million Total number of transaction: 4.40 million Total transaction in amount: BDT 8,52 billion (USD

11 billion)

Data Source: Bangladesh Bank

Transaction pattern

Cash in; 43%

Cash out; 37%P2P; 17%

Salary; 1%

Utility; 2%

Others; 1%

After 3 years of evolution mobile banking in Bangladesh is still concentrated on the money transfer part.

Still there is an opportunity of introducing new and innovative lifestyle products

Important Facts

55%33%

12%

Yonger people have more mobile banking

accounts

15-25 years26-35 yearsOver 35 years

80% of the mobile users are male

In a recent study while people were asked “why do you use mobile banking?”

95%

77%

66%

53%

45% Easy procedure

Availability of Agent

Cost effective

Trustworthy

Instant

Strengths-Mobile banking awareness is good among customers-Minimal cost of agent rollout compared to bank branches-Aligned with government agenda of “Digital Bangladesh”

Weaknesses-Security issues-Multi partner model : Bank, telecom, technology provider, distribution partners-Conservative approach by Banks

Opportunities-Huge unbanked population-Merchant and corporate solution-Online possibilities like buy and sell- Lifestyle products

Threats-Money laundering-Fraud management-Existing strong players

SWOT

Regulation From legal and regulatory perspective, only the bank-led model will be allowed

to operate The guidelines shall apply to the scheduled commercial banks and their

subsidiaries operating in Bangladesh. Commercial banks or their subsidiary may operate this service after getting

approval from Central bank It is the bank’s responsibility to identify, contract, educate, equip and monitor

activities of the agents. Those who have country-wide branch network such as NGOs, the MNOs or Govt. Postal Department may act as partner/agent.

One bank is allowed to tie up with as many other banks and as many MNO’s for the convenience of the user. So an interoperability is allowed

The account will be termed as a “mobile account” It is a non chequing, interest bearing account The mobile account holder’s KYC is the bank’s liability and responsibility.

The authenticity of the KYC will be a joint responsibility of the bank and the cash point/agent

The relevant balance in bank book shall be equal to the virtual balance of all registered mobile accounts shown in the system The banks bear all the liabilities that arise from improper action on the part of

their subsidiaries/cash points/agents/partners Banks shall be held responsible to protect consumer rights and dispute

resolution.

Mobile banking services approved by Bangladesh Bank

Disbursement of inward foreign remittances Cash in/out using mobile account through agents/Bank branches/ATMs/MNO’s outlets P2B: Person to Business Payments (utility bill payments or

merchant payments) B2P: Business to Person Payments (salary disbursement, dividend

and refund warrant payments, vendor payments) G2P: Government to Person Payments (elderly allowances,

freedom-fighter allowances, subsidies) P2G: Person to Government Payments (taxes, levy payments,

police fine) P2P: Person to Person Payments P2P (One registered mobile

account to another registered mobile account) Other Payments (microfinance, overdraft facility, insurance

premiums, deposit pension scheme deposits)

Mcommerce ecosystem

Top up

M-payment

Ticketing

M-bill pay

M-salary

Promotional Campaign

M-giftingGovernment

payment

Inter operability

Insurance

Loyalty program

M-wallet

Local remittance

International remittance

Government

NGO

International Remittance

House

Banks

Mobile operator

Retail & distribution

3rd party platform provider

Regulator

Thanks

Mcommerce opportunity in bangladesh (mobile banking, next big thing)

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