Current situation of mobile financial services

Mobile Financial Services (MFS) is a system or method through which a financial institution

provides services to the public through the use of a combination of banking and mobile wireless

networks, allowing users to conduct banking transactions. Using a registered mobile account,

MFS has streamlined the process of making deposits, withdrawing cash, sending and receiving

monies. Put another way, MFS makes it simple to obtain financial services through the

traditional financial system. Mobile Banking, as it is known in Bangladesh, is a variation of

MFS.

In Bangladesh, mobile banking services are already gaining traction. The industry will soar to

new heights if interoperability between operators and compliance is ensured, the service's cost is

reduced, and a level playing field is guaranteed. One-stop shop for everything from sending and

receiving money to paying for services like utility, transit, education, and healthcare, this

business has arisen. Increasing financial inclusion has never been easier thanks to this

breakthrough. The World Bank estimates that in 2017, half of all people had a full-service

financial institution account in their name. In 2011, the Alliance for Financial Inclusion (AFI),

the world's leading organization on financial inclusion policy and regulation, found that there

had been a 56% rise in the number of people accessing financial services. Most of this growth

can be attributed to MFS, which was first implemented in 2014 and has since grown

significantly. An further reason for increased use of mobile money and registration of new users

has been the government's attempts in 2015 to register SIM cards.

MFS are sometimes referred to as mobile banking in Bangladesh. It is a financial service

supplied by a bank or financial institution that enables users to conduct financial transactions

through the use of a mobile Smartphone. It is a self-contained service that is unrelated to any

other account. Any consumer can access this service by utilizing a standard mobile phone.

However, a customer must first open a mobile account using his registered SIM card, national ID

card, and photograph taken at a specific agent's shop (. It is commonly recognized that

technology can significantly improve productivity and effectiveness in the workplace by

reducing expenses and boosting customer service. People are increasingly focused on upgrading

financial systems and enhancing life quality through the use of technology. Numerous banks in

Bangladesh offer a variety of cost-effective technology-based channel services, including

automated teller machines (ATMs), telephone banking, online banking, and mobile banking,

which clients are encouraged to use.

Rural and unbanked populations can now access financial services via digital means, such as via

their mobile phones. Mobile banking is a way for customers of a bank to access information

about their accounts, goods, and services via mobile devices. Only SMS services were previously

available through this type of banking, which was also referred to as SMS banking. In 1999,

smartphones with WAP (Wireless Application Protocol) compatibility paved the way for

European banks to begin providing mobile banking services to customers.

Mobile banking, which began on March 31st of this year in Bangladesh, is a remarkable

development in the country's banking industry. At the time of writing, the following mobile

banking services are available in the United Kingdom: Inward foreign remittances; I Cash in/out

using mobile account through agents/Bank branches/or ATM's Mobile Operator's outlets; (ii)

Person to Business Payments (e.g. utility bills payment); (iv) Business to Person Payments (e.g.
salary disbursement by corporations/industries/offices etc); (v) Government to Person Payments

(e.g. elderly allowances, freedom fighter allowances, subsidies, etc); and (vi) Person to

Government Payments e.g. tax, levy paym

Private commercial banks often operate mobile banking services across the country at a faster

rate than their public sector counterparts. The majority of state-owned commercial banks, on the

other hand, have only recently embarked on this course of action. Specialized development

banks and non-Chinese commercial banks have not, however, implemented mobile banking

services to far. In May 2011, Bangladesh's Dutch Bangla Bank Limited unveiled the country's

first mobile banking service, dubbed "Rocket." Table 1 summarizes the expansion of mobile

banking services in the country by various financial institutions.

  
 Figure: Mobile banking adoption in Bangladesh.

Future of Mobile financial Service MFS

In Bangladesh, mobile banking services are already gaining ground. The industry will soar to
new heights if interoperability among operators and compliance is secured, the service's cost is
reduced, and a level-playing field is guaranteed. Bangladesh already has a lot of people using
mobile money. If operators can work together and stay on the same page, the service's cost will
go down, and the industry will reach a new level of competition.

The industry has become a one-stop shop for a wide range of transactions, from sending and
getting money to making payments for utility, transportation, education, medical, and retail bills.
This new technology makes it easier for people to get money.

This is what the World Bank says happened in 2017. In 2017, 50% of adults had a merchant
account under their own name with a full-service lender. This is based on a study by the Alliance
for Financial Inclusion (AFI), which is the world's top organization on economic inclusion policy
and regulation, and is based in Kuala Lumpur. Because of MFS since 2014, there has been a big
rise in this number. The government's efforts to register SIM cards in 2015 have also played a
role in the steady progress in mobile money and user registration. That interoperability should be
done right away, says Abul Kashem Md Shirin, CEO and managing director of the Dutch-Bangla
Lender Ltd, which owns Rocket, the country's main MFS provider. The use of mobile payments
and mobile wallets is expected to rise in the near future because they are safe, fast, and easy to
use. A lot of people are predicting that the global mobile payment market will reach $1 trillion
by 2019.

In Bangladesh, mobile banking services are already thriving. If interoperability and compliance
are achieved, the cost of the service is reduced, and a level playing field is maintained, the
industry will reach new heights.
The sector has developed into a one-stop shop for all types of transactions, from money transfers
to payment of utility, transit, education, medical, and retail expenditures. Financial inclusion has
been accelerated as a result of this invention.

According to the World Bank, 50% of people have an account with a full-service financial
institution in their name in 2017. This represents a 56 percent growth over 2011, according to a
case study conducted by the Alliance for Financial Inclusion (AFI), the world's largest
organization focused on financial inclusion policy and regulation headquartered in Kuala
Lumpur. This increase is primarily attributable to the establishment and expansion of MFS since
2014. In 2015, the government's initiatives to register SIM cards aided in the steady rise of
mobile money access and user registration.

Figure: Shops providing Mobile financial services

The Government of Bangladesh, through the Ministry of Information and Communications

Technology, supports the implementation of Digital Bangladesh – also known as Vision 2021 –
by leveraging technology effectively and efficiently to drive economic growth, with impact
measured in terms of improved education and health quality, poverty reduction, and declining
unemployment rates. Bangladesh has made significant strides in integrating technology into
many industries and streamlining good governance procedures and operations for more than a
decade. One critical tool being leveraged to accelerate digital development is the country's 171+
million mobile subscribers, 112+ million of whom are internet subscribers. Digital bill payment,
online tax returns, academic institution registration, digital health services, and online banking
systems have increased financial inclusion and technological adaptation prospects. However, as
the reliance on newer technology grows, a gap in digital literacy and access persists.