[Solved] mobile banking in bangladesh

Title of study: M-Commerce situation in context of Bangladesh and a study of present situation of mobile banking service implementation in various banks in Bangladesh as an m-commerce service.

1. Introduction
Few research have been done about mobile banking current situation in Bangladesh and future opportunities of mobile banking for ensuring the efficient digital service to all levels of people in Bangladesh including who are outside of banking service. No extensive research has been done so far. Mobile banking refers to a client-server system that is specifically designed for mobile devices, allowing banking customers to use handheld devices to access their accounts, pay bills, authorize fund transfers, or perform other activities.

Like many other m-commerce services, mobile banking services can be challenging and no single company has all the expertise required to develop and deliver compelling services on its own. Mobile banking (also known as M-Banking, SMS Banking) is a term used for performing balance checks, account transactions, payments credit applications and other banking transactions through a mobile device such as a mobile phone. The earlier mobile banking services were offered over SMS. 2. Background of Mobile Banking

A woman counts her cash after a withdrawal from the first cash point machine in London, in 1967. For 30 Years, financial institutions have been on a quest to satisfy their customers’ need for more convenience. First came the automated teller machine (ATM), which New York’s Chemical Bank introduced to the American public in 1969. It did little more than dispense cash at first, but the ATM evolved over time to become a true bank-away-from bank, providing a full suite of financial transactions. Then come Internet banking in the mid-1990s, which enabled consumers to access their financial accounts using a home computer with an internet connection.

Despite its promise of ultimate convenience, online banking saw slow and tentative growth as banks worked out technology issued and build consumer trust today, internet banking has reached a critical mass, with about 35 percent of U.S household conduction bank transactions online. Not so with mobile phones. They can carried anywhere and are – by an enormous number of people. More than 238 million people in the U.S have mobile phones. 3. Objectives of the study

To identify prospect of mobile banking in Bangladesh;
To detect problems of mobile banking in Bangladesh;
To make suggestions on the basis of findings

4. Methodology of the study
Methodology is a system of broad principle or rule from which specific methods or procedures may be derived to interpret or solve different problems within the scope of a particular discipline .Methodology is not a formula but set of practices. The study was conducted to identify the problems and prospects of mobile banking in Bangladesh. Necessary data were collected from different ages of people and analyzed in terms of the objectives set for the study. This study was based on field level data. There are several methods of collecting this basic information.

The data for this study were collected by the survey method. Survey is a research technique in which information is gathered from a sample of people by use of a questionnaire or interview. The word “survey” refers to a method of study in which an overall picture of a given universe is obtained by systematic collection of all available data on the subject. It is a method of data collection based on communication with a representative sample of individuals. The main reasons why the survey method is preferred to cost: Survey through sacrificing a certain details, enables quick investigation of a large number case. Survey entails much less cost

Surveys provide quick, less expensive, and efficient
4.1. Location/Geographic Coverage
The study has been conducted in different area of Dhaka city such as Sher-e-Bangla Nagar, Mirpur, Dhanmondi, , University, college, and many houses. 4.2. Types of Respondents
This research includes all types of people mostly selected different age, sex and occupation people. 4.3. Research Design

Mobile banking is a new technology for all people in Bangladesh. In this country, most of the people use traditional banking system. People are afraid of using mobile banking because they cannot feel it trust worthy. In our country, most of the customers are influenced by advertisement. In recent period, customers become more conscious about their savings. Marketers use these strategies for selling their products. Different banks advertise about mobile banking to give information about it to all the people in the country. This study has researched the consumer perception on mobile banking based on the above dimensions. Other relevant issues regarding the research are briefly presented below: 4.4. Sources of Data

Both primary and secondary sources were used for the research purpose. Secondary data were used for providing the theoretical background to the research problem. The secondary data sources were-journal, internet, etc. Primary data was collected through household survey by using appropriate research instrument. In the primary data collection procedure every individual respondent has been considered as potential respondent in the research. 4.5. Questionnaire Type and Responses

The questionnaire was starting with some introductory questions such as name, age, occupation, education, income and address. These questions provide the basic information about respondents. These types of questions make respondents comfortable to respond the study. There are some questions in this questionnaire. The respondents were asked the questions to know their knowledge and perception about mobile banking like “Have you ever heard about mobile banking?”, “Do you think you should use it?”, “Do you think mobile banking is trust worthy?” etc. 4.6. Sampling Method

The basic sampling procedure for the study was convenience with cluster sampling. 4.7. Research instrument

Information was collected through interviewer administered questionnaire method and through different secondary media. The questionnaire contains several questions for different respondents. 4.8. Period of Data Collection

Data were collected by the researcher himself through personal interviews with the respondents. 4.9. Data Collection and Accuracy of Data Generally most of the people are not interested to give time to answer a questionnaire. So it was very difficult to collect actual data because the information of the respondents was collected by approaching them to answer the question. To overcome this problem, all possible efforts were made by the researcher himself to ensure the collection of reasonably accurate information from the respondents.

So, it has not been possible to apply any other method of investigation. Survey method has the advantage that it facilitates quick investigation and involves higher cost. In order to collect relevant information before taking interview, the whole academic purpose of the study was clearly explained and made clear to the respondents. The researcher himself collected the relevant data from the respondents through face to face interview. Data collected were checked and verified in the field for accuracy and consistency. 5. Result and Findings

Basically the research was of descriptive in nature. Qualitative data are analyzed critically using judgment. Several statistical and analytical methods and tools were used for analyzing the gathered data from the survey. Column chart has been used as graphical tools to show the analysis of data. The package used in the study was: Microsoft Word. 5.1. Heard about Mobile Banking

Mobile banking is a new technology in Bangladesh which started from 31 March 2011. Dutch Bangla Bank Limited pioneered in mobile banking services in Bangladesh. Most people heard about it but not have a clear idea. According to my survey almost 94% people heard about mobile banking and 6% haven’t heard about mobile banking. 5.2. Dutch-Bangla Bank Limited

“Dutch-Bangle Bank Limited” (DBBL) has for the first time introduced its mobile banking service expanding the banking service from clients to remote areas. Bangladesh bank governor Atiur Rahman inaugurated the service by depositing Tk 2,000 and withdrawing Tk 1,500 through Banglalink and city cell mobile networks in motijheel area. Bangladesh bank has already allowed 10 banks to initiate mobile banking. Of them DBBL kicked off first “Mobile banking is an alternative to the traditional banking through which service can be reached at the doorsteps of the deprived section the society,” the central bank governor said at an inaugural press briefing at Hotel Purbani. Atiur Rahman said through mobile banking various banking services including depositing and withdrawing money, payment of utility bills and reaching remittance to the recipient would be possible. By going to the DBBL-approved Citycell and Banglalink agents throughout the country the subscribers on showing necessary papers and payments of a fee of Tk 10 can open an account.

To avail of the banking service a subscriber will require owning a cell phone of any provider and he will be given a four –digit PIN. By using the PIN he can operate all types of banking services including depositing and withdrawing money maintaining security and secrecy of his account. The customer will hand over cash to the agent and the will initiate the transaction from his mobile phone, the agent will help the account holder to do the banking using his PIN.

A customer can deposit or withdraw money five times a day and he can deposit or draw Tk 5000 per day. One percent of the transaction amount or Tk 5, whichever is higher, will be taken as cash –in-charges. In case of cash out the charge will be 2 percent of the transaction amount or Tk 10. However, the registration fee, salary and remittance disbursement services will be provided free of cost. DBBL has 4585 agent all over Bangladesh. Dhaka Division (2444), Chittagong Division (1207), Sylhet Division (306), Barisal Division (131), Rampur Division (224), Khulna Division (129), Rajshahi Division (144). [website 4] 5.3. Features/Services of DBBL Mobile Banking

Customer Registration
Cash-in (Cash deposit)
Cash-out (cash withdrawal)
Merchant Payment
Salary Disbursement
Foreign Remittance
Air-time Top-up
Fund Transfer

5.4. BRAC Bank Limited
“BRAC Bank Limited” is set to introduce mobile banking secondly, a top official said the service will enable millions of banked and unbanked people to deposit, withdraw and transfer money through mobile phones. BKash, a joint venture between BRAC Bank and US-based Money in motion, will provide mobile banking with a fully encrypted VISA technology platform for transactions through mobile phones. Any mobile can register and open up a bKash account and then do transactions through their mobile phones in easy, convenient and reliable way. “bKash will fundamentally change the way people now do transactions, as all transactions will be possible through mobile phones in future, “ said Syed Mahbubur Rahman, managing Director of the bank “Customer will not need to the bank; rather the bank will go to the them, “he said at a press conference in Dhaka on the occasion of its 10th founding anniversary the bank said a bKash account will act as a digital mobile wallet and anybody can taken the service. “Your mobile phone will become your wallet Customers can get financial services through phones, even by the handset that costs the lowest, “Rahman Said. Under a partnership with UNDP and Local Government Division, bKash is rolling out mobile banking in 4501 union parishads in the country. bKash has already signed a deal with a leading mobile operator and is in talks with others to enable all mobile users—currently around 7.5 crore to have individual digital wallets, said Mamdudur Rashid, deputy managing director of the bank. BRAC Bank launched its operation 10 years back with the objective of bringing unbanked people under formal banking coverage.

The business model of the bank is to mobilize deposits from urban areas and disburse it to rural, areas. The country’s youngest bank has already set some records; it has acquired over 12 lakh customers, bringing full banking services not only to small and medium enterprises, but all strata of the banking industry, said the bank “Being the youngest Bangladeshi bank, we have emerged as the largest SME bank service about 3.65 lakh entrepreneurs at grass roots level, an achievement the helped global recognition for this Bangladesh bank, “said Rashid the bank believes in 3 Philosophy – people, planet and profit and has been active in Green banking. It has already turned 22 of its SME unit offices solar powered and plants to convert the rest in the same manner by 2012. [Website] 5.5. Features/Services of bKash Mobile Banking

Cash in & Cash out
Send money
My wallet
check balance
Request statement
Change pin

5.6. Features
Remittance in minute
User Friendly- adoption of mobile phones & applications

Maximum Area coverage; Locations distributed throughout the country (Presently 2000 Pos), to be expanded to all Post office locations Transaction security ensured by a 16 digit auto PIN generation mechanism Independent of Mobile operator-customer enjoying mobile operators service can use this service. EMTS devices not specific to power sources like electricity have freedom of using Source of Power (electricity, battery, solar charger) Ensure customer satisfaction- Daylong well acquainted Help Desk Service Optional Corporate Services;

One 2 Many transactions-Option for Salary Disbursement
Many 2 One Transactions- Option for collection of tuition/Admission fees from student Location Independent Disbursement.
Database Management and Security-VPN Connectivity
Widely used Network Partner- Banglalink Mobile Operator
5.7. Interest to Use
Many people heard about mobile banking. But they yet have not felt that they should use it as they are happy to use traditional banking system. Some people feel interest to use it. About 55% people feel they should use it and 45% people haven’t feel to use mobile banking according to the survey. 5.8. Takes Time by Mobile Banking than Traditional Banking

Mobile banking is real time on-line banking. As it is on-line banking it takes less time than traditional banking. It will make access to banking and advanced payment, transactions at affordable cost People have not to wait by standing in a long line which is happen in traditional banking system. But some people think it takes higher time and some people think it takes same time as traditional banking. According to the research only 5% people think it takes higher time, 34% people think it takes the same time and 61% people think it takes lower time than traditional banking system. 5.9. Time Saving

Mobile banking is available anytime, anywhere throughout the country. So it can save one’s time. But all people not think the same. About 70% respondents think that mobile banking can save their time, where as 30% think it cannot save time. 5.10. Cost

It is convenient, affordable and it is much more effective in developing savings habits, it will make access to banking and advanced payment transactions at affordable cost. All people know that its cost is not higher than traditional banking. Around 56% respondents say its cost is lower, 20% say same and 24% say it Is affordable than traditional banking. . A positive aspect of mobile phones is that mobile networks can reach remote areas at low cost. 5.11. Trust Worthy

It is much safer and safeguard against fraudulent transactions. One can trust mobile banking as traditional banking system. It has secured pin code which is known by the user, and also has a check digit without it no one can deposit money. But in Bangladesh traditional branch-based banking remains the most widely adopted method of conducting banking transaction.

The poor often have greater familiarity and trust with mobile phone companies than formal banking institutions. Furthermore a mobile handset can easily be adapted to handle banking transactions. But it is not commonly known by all. From the survey itis found that 63% respondents think mobile banking is trust worthy and 37% respondents feel it is not trust worthy. 5.12. Use

It is much more effective in developing savings habits. Its using system is also easy. Anyone can use it. Poor people are often not considered viable customers by the formal financial sector as their transaction sizes are small, and many live in remote areas beyond the reach of banks branch networks. Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. So, mobile banking system develops to bring poor people into banking system. 83% respondents face or heard no problem to use mobile banking. But 17% respondents heard or face problems to use it like- sometimes transaction do not reach at time, cannot operate it easily as traditional banking, not trust worthy. 6. Prospect of mobile banking in Bangladesh

Mobile Banking is a Banking process without bank branch which provides financial services to unbanked communities efficiently and at affordable cost. The aim of the service is to bring more people under the umbrella of banking service. Bangladesh Bank governor Dr Atiur Rahman inaugurated the service through deposit and withdrawal of money from two banking outlets in the city. Government thinks it has a great prospect as it is a new technology in digital Bangladesh. But in Bangladesh many people think traditionally, because they cannot think it has any facility to use mobile banking. 69% people feel mobile banking has prospect in Bangladesh whereas 31% think it has no prospect in Bangladesh as many people will not feel interest or have belief on mobile banking. 7. Suggestion to other to use the system

55% feel interest to use mobile banking but most people do not want to give suggestion to other to use it. As it is a new method of banking people haven’t 100% faith on it. So, people don’t want to take any risk by giving suggestion to use it. 68% respondents say they do not want to give suggestion and 32% respondents say they want to give suggestion to use mobile banking. 7.1. Make Life Easier

Mobile banking is real time on-line banking, available anytime, anywhere throughout the country, it is convenient, affordable and secure, it is much more effective in developing savings habits, it will make access to banking and advanced payment transactions at affordable cost, it is much safer, speedy and safeguard against fraudulent transactions. All of the characteristics of mobile banking make life easier. But 43% respondents feel it will not make life easier as it may not be trust worthy, but 57% respondents feel the facility which mobile banking give will make life easier. 7.2. Security

In mobile banking a confidential pin code is used by the user. PIN ensures security of money and protects fraudulent transactions. So mobile banking is fully secured. It also believed by 70% respondents, but about 30% respondents say it is not secured as they cannot fully trust on online banking than traditional banking system. 7.3. Speedy Process

One benefit of mobile banking is a very speedy process. Transaction can be done anytime anywhere quickly in less time. So 100% people believe that it is a speedy process. 7.4. Class of People Mobile banking started with the idea to bring the poor under the umbrella of banking sector especially rural poor as there are not much bank facilities, also there savings is low so they feel shy to go to bank. But according to my survey 38% respondents feel upper class, 21% respondents feel middle class people can use mobile banking. But 41% respondents say mobile banking can be used by all class of people. 8. Problems Encountered in Collecting Data

The researcher had to face the following problems in collecting data from the respondents: i. Generally most of the respondents have not enough idea about mobile banking. So it was very difficult to collect actual data because the information of the respondents was supplied from their idea. ii. Most of the respondents were not fully use mobile banking which caused another problem to data collection to the researcher. iii. Sometimes respondent could not answer to questions accurately and to the point. iv. The respondents were usually remaining busy with their work. So, the researcher had to visit some of them even at the work place and researcher sometimes had to pay more time to meet the respondents. v. Most of the respondents did not feel comfortable to answer questions. So researcher had to pay more time to gain their confidence.

9. Network Architecture of Mobile banking System

10. Conclusion
Some policy Implications, Mohammad Mizanur Raman, (www.ampublisher.com)

Mobile Phone Banking offers the potential to extend low cost virtual bank accounts to a large number of currently un-banked individuals worldwide. Change is being driven by falling costs of mobile phones including airtime, by competition and by the ability of electronic banking solutions to offer customers an enhanced range of services at a very low cost. Text-a-payment (TAP) builds upon the familiarity and comfort that people around the world have with sending text messages via their mobile phone. Instead of traveling to the bank to make their loan payment, clients can now text their loan payment directly to the bank; saving them both travel time and money.

This is also beneficial for the bank, since they can increase their outreach to rural areas while reducing their costs. (Catching the Technology Wave: Mobile Phone Banking and Text-a-Payment in the Philippines,John Owens, Anna Bantug Herrera,www.bwtp.org) M-Banking technology has become one of the most familiar banking features throughout the world. Nowadays millions of inhabitants of Bangladesh are within a network through mobile network coverage. But in the commercial sectors like banking, m-Commerce technology has not been adopted broadly yet. In context of Bangladesh where almost 95% of geographical areas including Chittagong Hill tract region is under cellular coverage and having sufficiency in Internet infrastructure in remote regions, m-Banking via mobile phones can be the right choice for the promising banking sector.

Considering m-Commerce and m-Banking perspective in Bangladesh, a Push Pull services offering SMS (Short Messaging Service) based m-Banking system has been proposed which is able to provide several essential banking services only by sending SMS to bank server from any remote location. This proposed system is divided into five major phases: Interfacing Module, SMS Technology Adoption Module, SMS Banking Registration Module, Push Pull m-Banking Services Generation Module, and Modified Data Failover Module.

This push-pull services specified system facilitates bank customers by carrying out real time m-Banking utilities by categorizing services into five major on the basis of their homogeneity. They are Broadcast, Scheduling, Event, and Enquiry and m-Commerce services. Fifteen push pull services underlying these categories are implemented in this proposed system which are most desired to customers.

The proposed system not only brings banking transaction in hand’s grip but also makes it easier, robust and flexible with highest security. Moreover, modified data failover algorithm handles unexpected SMS server failure with any congestion or service request loss. At last, after evaluating each module of our proposed system a satisfactory accuracy rate


Ahmed, S. M. Sohel, and Asaduzzaman, Md. (2011), ‘‘Consumer Choice Behavior towards Mobile Phone Operators in Bangladesh’’ -Journal of Arts, Science & Commerce, ■ Vol. – II, pp. 30-39 Al-Akhras T Mousa,Al-Saiyeed Rizik,Alian Marwah and Qwasmi Doaa:Innovative Secure Mobile Banking Services,2011, p.195. Al-Ashban, A.A. & Burney, M.A. (2001), “Customer adoption of tale-banking technology: the case of Saudi Arabia”, International Journal of Bank Marketing, 19 (5), pp. 191-200.

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